\u3000\u30 Shenzhen Fountain Corporation(000005) 55 Digital China Information Service Company Ltd(000555) )
The company issued its annual report for 2021. The company achieved an operating revenue of 11.356 billion yuan, a year-on-year increase of 6.27%; The net profit attributable to the parent company was 376 million yuan, a year-on-year decrease of 20.92%; Net profit deducted from non parent company was 315 million yuan, with a year-on-year increase of 46.14%.
Key investment points:
The revenue structure was significantly improved, and the deduction of non net profit increased rapidly: 1) on the revenue side, the company has actively contracted non-financial business since focusing on the financial technology strategy, and the business income of operators decreased by 7.11% year-on-year, reducing the growth rate of overall revenue. The revenue of financial soft services increased rapidly as scheduled. In 2021, the operating revenue of the company’s financial industry reached 5.022 billion yuan, a year-on-year increase of + 18.35%, accounting for 4.51 PCT to 44.23% of the company’s total revenue, of which the software business revenue was 2.52 billion yuan, a year-on-year increase of + 26.7%, and the gross profit margin was 27.14%, a year-on-year increase of + 0.21 percentage points. 2) On the profit side, the decline of the company’s net profit attributable to the parent company was mainly disturbed by non recurring factors. The company disposed of the equity of some participating companies in non-financial technology business in 2020, resulting in an increase in non recurring profits and losses in that year, while the non recurring profits and losses in 2021 were small.
The new generation core system and ESB maintained a leading position: the company’s new generation core system continued to be implemented, and signed the second phase of Postal Savings Bank Of China Co.Ltd(601658) new generation core implementation business overall control project; Continuously participate in the construction of distributed platform of Bank Of China Limited(601988) ; Signed the core system construction projects of 13 banks including Guangdong Development Bank and Bank Of Beijing Co.Ltd(601169) etc. At the same time, the rapid leap in the company’s core project delivery capacity has formed a delivery capacity that can support 14 core projects at the same time. 15 new customers of enterprise level micro service platform and enterprise service bus (ESB) have been expanded, and 11 existing customers have been upgraded.
Actively grasp the opportunities of financial information innovation and digital RMB: the company signed a contract of 840 million yuan for financial information innovation business, added more than 20 benchmark cases in the financial information innovation industry such as regulators and large bank customers, and participated in the information innovation planning consultation of more than 20 pilot financial institutions such as banks, insurance and securities. In 2021, the company’s digital RMB solution has been implemented in nearly 20 banks, and helped Beijing Dongcheng District Taxation Bureau successfully realize the city’s first digital RMB payment of entrusted tax collection business. At the same time, the company actively explored the scenario Innovation and application of digital RMB and launched digital RMB
Prepaid consumer service platform, smart contract and other products.
Profit forecast and investment suggestions: it is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 124.63/135.8414742 billion respectively, and the net profit will be RMB 469567/663 million respectively. The corresponding closing price PE on April 6, 2022 will be 27.24/22.55/19.29 times respectively, maintaining the “buy” rating.
Risk factors: the business model transformation is less than expected, the promotion of Xinchuang is less than expected, the digital RMB business opportunity is less than expected, and the technology research and development is less than expected.
