\u3000\u3 Guocheng Mining Co.Ltd(000688) 588 Linkage Software Co.Ltd(688588) )
Event:
The company issued the 2021 annual report after the closing on April 7, 2022.
Comments:
The business volume increased steadily, and the net profit was affected by the fluctuation of yen exchange rate
In 2021, the company actively expanded new customers and projects, strengthened technology and product innovation, steadily increased its business volume, and achieved an operating revenue of 653 million yuan, a year-on-year increase of 3.58%; The net profit attributable to the parent company was 146 million yuan, a year-on-year decrease of 27.28%; The net profit deducted from non parent company was 108 million yuan, a year-on-year decrease of 28.81%. The company’s business income to Japan accounted for 84.20% in 2021. Most of the business income is calculated in Japanese yen, and most of the corresponding costs and expenses are paid in RMB. In 2021, the exchange rate of Japanese yen dropped sharply, which affected the operating income of the company, and the exchange loss also increased sharply, resulting in the decline of net profit. If calculated at the exchange rate of yen in the same period of last year, the company’s operating revenue will increase by 520606 million yuan and the exchange loss will decrease by 331185 million yuan in 2021 (deducting the income generated by the company’s purchase of yen forward foreign exchange settlement products).
Pay attention to the construction of R & D team and talent training, and continuously improve the product R & D ability
The company attaches great importance to the construction of R & D team and the cultivation of R & D talents. In 2021, the R & D cost was 64 million yuan, with a year-on-year increase of 7.10%, accounting for 9.74% of operating revenue, with a year-on-year increase of 0.32 percentage points. The company has four invention patents and 177 software copyrights, including “financial derivatives trading system”, “mot management system and its implementation method”, “an automatic generation system of Information Research Report” and “a method of constructing 3D histogram based on flex”. Lexus lmsp Enterprise Development Platform Software v1 0 and Lexus Data Mining Analysis Service Platform Software v1 0 is recognized as a high-tech product by the Department of science and technology of Jiangsu Province; The project of ” Citic Securities Company Limited(600030) brokerage business mot system” developed by the company for Citic Securities Company Limited(600030) won the “excellence award of the fourth securities and futures science and Technology Award”.
Actively explore new customers and make simultaneous efforts in Japan business and China business
In 2021, the company made great efforts to develop new customers and added new customers such as TDC ソフト Co., Ltd., DTS Co., Ltd., アクティア Co., Ltd., Nomura international Orient Securities Company Limited(600958) Co., Ltd., Standard Chartered securities (Hong Kong) Co., Ltd., Ping An Asset Management Co., Ltd. Participate in the development of China’s securities industry’s digital application solutions through in-depth R & D. In 2021, the overall function upgrade of “Zhisheng platform” Zhongtai project has been completed; “Kechuang financial wisdom ecological platform” 1.0 has been completed and the construction of platform 2.0 is being promoted in an orderly manner; The blockchain based customer interaction behavior system management system product, developed in cooperation with the head securities companies, has been listed by Beijing Securities Regulatory Bureau as one of the first 16 pilot projects of the capital market financial science and technology innovation pilot (Beijing).
Profit forecast and investment suggestions
The company is mainly engaged in Japanese software development business and Chinese application software solution business, gradually forming advantages in technology, software development ability, talent and customer resources, and has a broad growth space. It is predicted that the operating revenue of the company from 2022 to 2024 will be 801, 975 and 1173 million yuan, the net profit attributable to the parent company will be 242, 307 and 386 million yuan, the EPS will be 0.60, 0.77 and 0.97 yuan / share, and the corresponding PE will be 20.48, 16.10 and 12.82 times. Since its listing, the company’s PE has mainly operated between 30-130 times. Considering the growth of the company and the change of industry valuation level, the company is given 35 times of the target PE in 2022, and the corresponding target price is 21.00 yuan. Maintain the “buy” rating.
Risk tips
Covid-19 recurrent pneumonia; exchange-rate risks; The risk of relying on the Japanese market; China’s market expansion is less than expected.
