\u3000\u3 Guocheng Mining Co.Ltd(000688) 561 Qi An Xin Technology Group Inc(688561) )
Investment Event: the company released its recent operation: as of the end of March 2022, the company’s orders on hand exceeded 2.3 billion yuan, and the new orders in 2022 exceeded 900 million yuan, a year-on-year increase of more than 65%. The company expects the revenue to increase by 43% – 47% year-on-year from January to March 2022.
Revenue continued to increase, and breakthroughs were made in international business. According to the express report of the company’s 2021 annual report, the company’s revenue reached 5.811 billion yuan in 2021, with a year-on-year increase of 39.64%, and the revenue scale reached a new high. From the perspective of product line, due to the continuous implementation of “high-quality development” strategy and “platform” strategy, the competitiveness of core products continues to improve. Among them, the revenue of data security and privacy protection exceeded 1.1 billion yuan in 2021, with a year-on-year growth rate of more than 50%. It is expected to continue to maintain high-speed growth in 2022; The revenue of actual situation awareness products exceeded 1.2 billion yuan, with a year-on-year growth rate of nearly 30%; The revenue of terminal security products exceeded 800 million yuan, with a year-on-year growth rate of more than 30%; The revenue from border security, security services and security operations increased well. The company’s international business has made a breakthrough. Some of the company’s core products have international competitiveness, opening up new market space for the company’s development.
The gross profit margin continued to rise, the expense rate continued to decline, and the human efficiency index continued to improve. The gross profit margin of the company increased slightly year-on-year in 2021, and the revenue achieved high-quality development. At the same time, after the high R & D investment period in the early stage, the company entered the achievement transformation period, the operation efficiency was improved, and the expense rate decreased significantly. In 2021, the total proportion of the company’s three rates decreased by 6.37 percentage points. In addition, the R & D platform strategy of the R & D company has been successfully implemented, and it is expected that the R & D efficiency will be greatly improved in 2022, which will become the support point for the high-quality development of the company during the 14th Five Year Plan period. In the achievement transformation period, the company’s per capita income is expected to enter a new stage, reaching 1 million yuan / person, and the company’s profitability is expected to be further improved.
The demand side of the network security industry is strong, and the performance of leading companies is expected to maintain high growth. 2022 is a year for the continuous implementation of China’s network security policies. With the implementation of important documents such as the data security law of the people’s Republic of China, the three-year action plan for the high-quality development of the network security industry (20212023) (Draft for comments), the regulations on the security protection of key information infrastructure and the personal information protection law of the people’s Republic of China, it is expected that the industry will continue to develop rapidly. The 14th five year plan proposes Digital China, which accelerates the construction of China’s digital economy and has strong demand for Chinese clients. As a new generation of network security leading enterprise in China, the company has complete product system and obvious core competitive advantages. It is expected to achieve sustained and high growth in revenue scale.
Investment suggestion: it is estimated that the company’s EPS will be RMB -0.19/0.23/0.93 in 2021 / 2022 / 2023 and pe395.00 in 2022 / 202321 / 97.91 times. Considering the high growth of income and the improvement of profits, it is rated as “buy”.
Risk tip: the implementation of policies is slow, the business progress of the company is less than expected, and the market competition is intensified
