\u3000\u3 Guocheng Mining Co.Ltd(000688) 561 Qi An Xin Technology Group Inc(688561) )
Main points:
Since its establishment in 2014, the company has developed into China’s leading large-scale government enterprise network security supplier based on big data, artificial intelligence and safe operation technology, with continuous high R & D and first mover advantages in the layout of the new track. Its business covers network security products, network security services and hardware. From 2016 to 2021, the compound growth rate of the company’s revenue was about 55%. The company has a comprehensive product line. According to the eighth version of the panorama of China’s network security industry released by the security bull, the company was selected into 13 primary security fields and 94 secondary subdivision fields, becoming the enterprise with the most subdivision fields selected in the panorama for many consecutive years. At the same time, the company ranks first in the industry in the fields of zero trust, terminal security, situational awareness and Threat Intelligence. In the future, the new track products + services are expected to become the main force of the company’s revenue growth.
The industry trend is inclined to active defense, and policy + demand will help the future development
China’s network security industry has now entered a dynamic and active defense stage. Downstream demand has changed from compliance oriented to strong security oriented, and the growth rate has begun to rise. According to the data of the Institute of information and communications technology, the scale of the global network security market in 2020 was 136.66 billion US dollars, and the North American market accounted for 46.8%. China’s market size is 53.2 billion yuan, accounting for only 6.1% of the global market. It has great growth potential in the future. The main driving forces are: 1) the stimulation of network security related policies: the network information office and other departments have successively issued policies and regulations such as network security law, equal security 2.0 and data security law to create a development environment; 2) The change of security threats makes the security technology constantly updated and iterated: from the mainstream security threats such as viruses, Trojans and worms in the past to the new security threats such as blackmail viruses and supply chain attacks, the security threats are becoming more and more diverse and the complexity is also increasing, and the essence of security is attack and defense. Therefore, the change of security threats will make the traditional network security products and technologies unable to meet the security defense, So as to force the continuous update and iteration of safety technology; 3) The development of the emerging industry “Yunda things relocation industry” has spawned new security needs: the development of cutting-edge technologies such as cloud computing, big data, Internet of things, mobile Internet, 5g and industrial Internet will make the traditional network security products no longer meet the needs of customers, thus forcing the network security industry to change the security concept, pay more attention to the active defense in network security, carry out innovative changes and improve the ability of network security, Usher in a new wave of investment opportunities.
The product platform system is taking shape, and it is expected to make a profit by taking advantage of the “East” wind
In the future, the downstream demand of the network security industry will grow rapidly. The plan of “computing from the east to the west”, one of the application scenarios, is expected to leverage the 17 trillion digital industrialization and 70 trillion industrial digitization, which will give birth to the needs of data security, border security and actual situation awareness, which is conducive to the improvement of the company’s revenue in these three aspects. According to the 2021 performance express, the company’s revenue of the above three categories of products increased by more than 30% year-on-year, which is expected to maintain. In addition, the company’s four categories of products and safety services have formed a complete system, which can meet the various needs of various downstream government and enterprise users in the future. The gradual implementation of the platform will also liberate the productivity of the company’s technicians, shorten the project duration, ensure the stability of project quality, avoid the impact of personnel loss, and facilitate the further expansion of the company’s revenue. At the same time, the high investment period of the company’s platform will gradually end with the implementation of the project, the improvement of R & D capacity, the growth rate of R & D and sales expense rate will be restrained, the profit space will be realized gradually, and the profit inflection point this year is expected to come.
Investment advice
Qi An Xin Technology Group Inc(688561) in the past, the R & D investment in the platform was high, and the market share of the network security industry remained the first. It is qualified to realize the growth of revenue and profit in large quantities in the future. Under the catalysis of “counting from the east to the west”, the demand for network security products and services continues to release. We expect the company to achieve revenue of 5.811 billion yuan / 8.137 billion yuan / 11.397 billion yuan from 2021 to 2023, with a year-on-year increase of 39.6% / 40.0% / 40.1%; The net profit attributable to the parent company was -552105/383 million yuan, with a year-on-year increase of – 65.2% / 119.1% / 263.9%. It was covered for the first time and given a “buy” rating.
Risk tips
1) the effect of controlling expenses of the company in the future is not as expected; 2) The effect of policy stimulus is less than expected; 3) After the landing of the company’s platform, the efficiency was lower than expected.
