\u3000\u3 Guocheng Mining Co.Ltd(000688) 561 Qi An Xin Technology Group Inc(688561) )
Core view
Event: on March 29, the company announced its recent business situation. Since 2022, Qi An Xin Technology Group Inc(688561) continued to implement the development strategies of “Olympic”, “internationalization”, “LEGO” and “service”, and all major businesses continued to maintain a high-speed development momentum. Thanks to the strong demand of key information infrastructure customers such as operators, energy, finance and so on, the company’s orders have exceeded 2.3 billion yuan so far, In 2022, the new orders exceeded 900 million yuan, with a year-on-year increase of more than 65%. According to the preliminary financial calculation of the company, the company expects the operating revenue to increase by 43% – 47% year-on-year from January to March 2022.
The annual R & D expense rate is expected to decline significantly. On March 20, the company held the 2022 annual meeting, and the chairman of the company delivered an important speech. It focuses on promoting the company’s high-quality development and turning losses into profits by improving R & D efficiency and organizational efficiency. In terms of R & D efficiency, since 2021, the company has continued to comprehensively lay out the strategy of “R & D capability platform”, and has gradually established eight R & D platforms, including “Kunpeng”, “Noah”, “Leier”, “Zion”, “Chuantuo”, “Dayu”, “Xuanji” and “Qianxing”, with eight network security R & D platforms as the core components and a small number of customized special components, Quickly develop network security products and solutions that can meet the customized needs of customers. With the mass production of R & D platform and the organizational adjustment of legionnaization, the company’s “platform” has achieved good results, the R & D efficiency has been greatly improved, and the proportion of R & D revenue in the whole year is expected to decrease significantly.
To improve organizational efficiency, key industries aim to achieve a growth rate of more than 100%. In terms of organizational efficiency, the company will focus on upgrading its marketing system and human resources system in 2022. Central enterprises, confidentiality, operators and Internet of vehicles are all areas with urgent network security. The company divides part of the Marketing Committee into military and Youth League committees, and part of the human resources center into human resources business partner centers. It establishes a separate Corps for key areas, quickly gathers resources and takes the lead in seizing the market. According to the 2022 annual meeting and the public research data on March 10, the Corps will aim to achieve 100% growth rate of the previous year, achieve more than twice the growth of gross profit, and the total financial gross profit contributed by the Corps organization will reach about one third.
Investment suggestion: China is a leader in the field of network security, with continuous R & D and innovation. With a comprehensive product system and strong security service ability, the performance is expected to continue to maintain rapid growth. We estimate that the operating revenue of the company from 2021 to 2023 will be RMB 5.811 billion, RMB 8.135 billion and RMB 11.226 billion respectively, the net profit attributable to the parent company will be RMB -551 million, RMB 70 million and RMB 355 million respectively, and the EPS will be RMB -0.81, RMB 0.10 and RMB 0.52 respectively. At present, the company has less than 5x PS in 2022, the valuation is at a historical low, the growth is high and the value is undervalued, maintaining the “buy” rating.
Risk warning: policy promotion is not as expected; Increased competition led to lower than expected product sales
