\u3000\u3 Guocheng Mining Co.Ltd(000688) 561 Qi An Xin Technology Group Inc(688561) )
Event: the company announced on March 30 that up to now, the company’s orders on hand exceed 2.3 billion yuan, and the new orders in 2022 exceed 900 million yuan, 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.
Key investment points:
The network security industry will remain high-profile for a long time, and Qi An Xin Technology Group Inc(688561) occupies a leading position in China’s network security. IDC data show that in 2021, under the global background of the impact of the epidemic and poor economic situation, the global network security industry maintained a growth rate of about 10%. The overall scale of global network security is expected to reach US $151.95 billion in 2021 and is expected to increase to US $223.34 billion in 2025, with a five-year compound growth rate of 10.4%. From the perspective of the Chinese market, IDC data show that the expenditure related to network security is expected to reach US $10.26 billion in 2021 and is expected to increase to US $21.46 billion by 2025. The five-year compound growth rate from 2021 to 2025 is 20.5%, ranking first in the world. According to the analysis report of China’s network security products in 2021, in 2020, Qi An Xin Technology Group Inc(688561) won the first place in the market share of China’s network security industry, with a market share of 7.8%, and its market position improved steadily (market share in 2018: 6.1%, market share in 2019: 6.6%). According to the “top 50 competitiveness list of China’s network security industry in 2021” released by China Network Security Industry Alliance (CCIA), Qi An Xin Technology Group Inc(688561) ranks first in the list.
This year’s network security revenue continues to maintain a high-speed growth trend, and the annual performance may turn losses into profits. The company announced on March 30 that up to now, the company’s orders on hand have exceeded 2.3 billion yuan, and the new orders in 2022 have exceeded 900 million yuan, a year-on-year increase of more than 65%. According to the preliminary calculation, the company’s operating revenue is expected to increase by 47% year-on-year from January to February 2023. Since 2022, the company has continued to implement the development strategies of “Olympic”, “internationalization”, “LEGO” and “service”, and various main businesses continue to maintain a high-speed development momentum. With the mass production of R & D platform and the organizational adjustment of legionnaization, the company’s R & D Efficiency has been greatly improved, and the proportion of R & D expenses and revenue in the whole year is expected to decrease significantly. On March 20, chairman Qi Xiangdong said at the company’s annual meeting that we should carry forward the “zero accident” spirit of the Winter Olympics and achieve high-quality development. The goal of Qi An Xin Technology Group Inc(688561) high-quality development this year is to turn losses into profits.
The first stage goal of “LEGO” is completed, and the platform products are put into mass production. According to the information of the company’s annual meeting, Qi An Xin Technology Group Inc(688561) has achieved mass production of Dayu, Chuantuo, Kunpeng, Leier, Qianxing and other platforms, achieved the goal of the first stage of Lego, liberated many people from the current situation of repeated wheel manufacturing, and greatly improved the R & D efficiency. Take Dayu platform as an example. Before the platform is put into operation, dozens of situational awareness products need to be independently developed by teams, and the manpower scale will be hundreds of people. The infrastructure of situation awareness products has something in common, which will lead to repeated development, resulting in a huge waste of manpower and cost. Dayu platform extracts the common core programs of all situational awareness platforms into a public platform. Based on this platform, the data and interfaces are standardized, so that the R & D cycle of most security products is shortened from the past 3-6 months to within a few weeks. The manpower scale has also been greatly reduced, which is equivalent to the efficiency of 1 for 10 or even 1 for 100. The establishment of these platforms is based on Qi An Xin Technology Group Inc(688561) five years of deep cultivation and high R & D investment. The data show that from 2017 to 2020, the R & D investment scale of Qi An Xin Technology Group Inc(688561) four years reached 3.634 billion yuan. We believe that the company’s R & D platform is composed of a large number of basic components and a small number of special components of network security in the way of “building blocks”, which can piece together ever-changing new products, so that the whole industry has walked out of the strange circle of high development cost, long cycle, poor expansibility and weak profitability. The improvement of its business efficiency in the future is worth looking forward to.
The “zero accident” practice of network security in the Winter Olympic Games has verified the company’s strong network security guarantee strength and high certainty of sustained and rapid growth in the future. On March 16, the Qi An Xin Technology Group Inc(688561) Winter Olympics network security zero accident experience propaganda group was officially established in order to further summarize the achievements and experience of network security in the Winter Olympics and apply it to the network security protection of key infrastructure. In order to more effectively summarize the experience of “zero accident” of network security in the Winter Olympics and effectively promote and apply the “China scheme” of zero accident of network security, Wu Yunkun, President of Qi An Xin Technology Group Inc(688561) group and Deputy commander-in-chief of Qi An Xin Technology Group Inc(688561) network security in the Winter Olympics, served as the head of the propaganda group, and Li Jianbin, professor and doctoral supervisor of North China Electric Power University, served as external experts, And Qi An Xin Technology Group Inc(688561) security experts to jointly form a zero accident experience propaganda group for network security in the Winter Olympics. According to public data, from the beginning of the Winter Olympic Games to the end of the winter Paralympic Games, Qi An Xin Technology Group Inc(688561) total detection logs exceeded 185 billion, the average daily detection logs exceeded 3.7 billion, about 5800 vulnerabilities were found and repaired, 54 malicious samples were found, 150 risk hosts were screened, more than 380 million network attacks were detected, and 105 Olympic public opinion and threat events were tracked, judged and disposed of. We believe that the “zero accident” of network security in the Winter Olympics has fully verified the company’s technical strength. The company has high certainty of maintaining sustained and rapid growth. The gradual reduction of R & D expense rate will also bring more certainty to the improvement of profits. In the future, Dayu, Chuantuo, Kunpeng and other R & D platforms will also release more support energy in mass production.
Steadily open the journey of the international market. On March 30, 20 defense attach é s from 18 Middle East and African countries including the United Arab Emirates, Tunisia, Egypt, Kuwait, Morocco and Zambia visited Qi An Xin Technology Group Inc(688561) . It is reported that Qi An Xin Technology Group Inc(688561) has carried out network security business in central and South Asia, South Asia, Central Asia, the Middle East and Africa in Europe, and provided network security services and solutions for some large Chinese enterprises “going global” and overseas branches of large Chinese banks. In 2021, Qi An Xin Technology Group Inc(688561) participated in the network security construction of key infrastructure departments and important government units in Indonesia, Algeria, Angola, Ethiopia and other countries; On December 31 of the same year, Qi An Xin Technology Group Inc(688561) international business obtained 70 million apt (advanced persistent threat) monitoring cooperation, and started the internationalization strategy from the internationalization of products, services and systematic construction.
Investment suggestion: we believe that the network security industry, as the premise and guarantee cornerstone of the development of digital economy, will remain high in the long run. The company’s high R & D investment has contributed to the significant improvement of the company’s product standardization, modularization and componentization capabilities. As a leading enterprise in the industry, the company will enjoy the industry development dividend. It is expected that the R & D expense rate will gradually decrease, which is expected to promote the rapid improvement of profitability. It is predicted that the operating revenue of Qi An Xin Technology Group Inc(688561) 2021, 2022 and 2023 will be 5.811 billion yuan, 7.973 billion yuan and 10.72 billion yuan respectively; The net profit attributable to the parent company is -552 million yuan, 58 million yuan and 170 million yuan respectively, and the corresponding EPS is -0.81 yuan, 0.08 yuan and 0.25 yuan respectively. The corresponding PS of the current stock price is 6.91 times, 5.04 times and 3.75 times respectively. Considering the industry position and future development prospect of the company, we give the target price of 85.20 yuan, corresponding to 10.00 times, 7.29 times and 5.42 times PS respectively, and give a “buy” rating.
