\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 570 Hundsun Technologies Inc(600570) )
Event: the company released its annual report for 2021, realizing an operating revenue of 5.5 billion yuan, a year-on-year increase of 31.7%; The net profit attributable to the parent company was 1.46 billion yuan, a year-on-year increase of 10.7%; The net profit deducted from non parent company was 950 million yuan, with a year-on-year increase of 29.0%. The performance is in line with expectations.
The new generation of IT products and the new generation of IT products will be promoted smoothly. By business. 1) Large retail IT business: in 2021, the revenue was 2.11 billion yuan, with a year-on-year increase of 39.8%, and the new generation of securities comprehensive financial service platform uf3.1 billion yuan 0 has achieved full-service launch, and has achieved in-depth cooperation with a number of head brokerage customers; 2) Big asset management IT business: the revenue was 1.71 billion yuan, with a year-on-year increase of 39.8%. O45 products were officially launched by the first customer in the fund industry, and the cases with a valuation of 6.0 in securities, banks, trusts and funds were also increasing; 3) Internet innovation business: the revenue was 800 million yuan, a year-on-year increase of 33.7%, and all subsidiaries steadily opened the market; 4) Data risk and infrastructure IT business: the revenue was 350 million yuan, with a year-on-year increase of 18.6%. During the reporting period, the construction of new modules was overweight, and the number of landing customers increased well; 5) Banking and Industrial IT business: it achieved 350 million, a year-on-year decrease of 2.5%. The China Taiwan strategy continued to deepen and further strengthened cooperation with joint-stock banks and toutoucheng commercial banks.
Continued investment overweight, short-term pressure on profitability. In order to meet the construction needs of a new generation of IT system in the era of financial technology, the company’s personnel team was significantly expanded to 13310 in 2021, a net increase of 3571 over the beginning of the year; The increase of personnel salary cost has put pressure on the profitability of the company. In 2021, the sales expense rate, R & D expense rate and management expense rate of the company were 10.2% (+ 1.67pp), 12.4% (- 0.53pp) and 38.9% (+ 3.07pp) respectively, and the gross profit margin decreased by 4.10pp to 73.0% year-on-year. Sustained high R & D investment has also achieved phased results, UF3 0, o45, valuation 6.0, new generation TA and other core products have all completed the upgrading of cloud native architecture, more than 30 business systems have completed the Xinchuang adaptation test, and the light cloud platform strategy continues to deepen. With the gradual polishing and maturity of series products and the acceleration of subsequent promotion, the gross profit margin is expected to recover and the profit elasticity will be released.
The announcement of repurchase is expected to establish a long-term incentive mechanism. The company announced in February 2022 that it plans to buy back some public shares with its own funds through centralized bidding transaction for equity incentive or employee stock ownership plan. The total capital of the shares to be repurchased this time shall not be less than 100 million yuan and not more than 150 million yuan, and the repurchase price per share shall not exceed 80 yuan / share. We believe that it has been nearly ten years since the company last issued the equity incentive plan. It is expected that the company will issue a new round of equity incentive draft after the repurchase is completed, which is expected to establish a long-term incentive mechanism, mobilize the enthusiasm of employees and demonstrate the company’s confidence in future development.
Profit forecast and investment suggestions. It is estimated that the compound growth rate of the company’s net profit attributable to the parent company will reach 21.1% from 2022 to 2024. The deepening reform of China’s capital market will continue to generate the demand for it system upgrading and iteration, and the information investment of downstream financial institutions is expected to increase; The company has long been in a leading position in China in terms of technology and market share, and will continue to benefit from the development of the financial technology era. The promotion and launch process of the new generation of products is expected to be accelerated, and the profits will be gradually released after the products are gradually polished and mature. Therefore, it is given 12 times PS in 2022, corresponding to the target market value of 83.2 billion yuan and the target price of 56.91 yuan. It is given a “buy” rating for the first time.
Risk tip: personnel expansion brings cost pressure; The promotion of new products is less than expected; Integration risk of overseas M & A; The investment of downstream financial institutions is less than expected.
