\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
Event: the company released its 2021 annual report, with annual revenue of 619 million yuan, a year-on-year increase of 35.65%; The net profit attributable to the parent company was 182 million yuan, a year-on-year increase of 50.89%; Net profit deducted from non parent company was 99 million yuan, with a year-on-year increase of 4.16%; The net cash flow from operating activities was 187 million yuan, a year-on-year increase of 24.44%.
2D and 3dcad have developed well in the application field of Xinchuang, and the performance of CAX products has been continuously optimized: 1) the performance advantages of 2dcad products and ZWCAD products have been further optimized, the adaptation range of zwcadlinux products to Xinchuang operating system and hardware has been expanded, and the secondary development ability has been improved; It realizes the format compatibility of mainstream mechanical formats at home and abroad, supports the seamless migration of mechanical drawings designed by other software to Zhongwang machinery, and improves the ease of use of mechanical software. 2) 3dcad products further expand the product advantages of zw3d in high precision and high efficiency under complex application scenarios, actively participate in information innovation, and release the professional version of zw3dlinux, China’s first 3D design platform software supporting domestic software and hardware. 3) CAE products and simulation series products zwsim have been further developed, and the capability of CAE products has gradually reached the commercial level of availability. The company continued to invest in R & D to carry out technical upgrading and transformation of products, and the R & D expenses increased by 34.23% year-on-year in 2021.
The equity incentive plan demonstrates the company’s confidence in development: in September 2021, the company launched the equity incentive plan and granted 572800 restricted shares for the first time to 375 people, including core technicians and key employees, at a price of 420 yuan / share. The performance evaluation target is that the revenue growth rates in 22-23 years are 82.25% and 146.04% respectively (based on the company’s operating revenue in 2020). In April 2022, the company announced that it planned to buy back the company’s shares with no more than 350 yuan / share (inclusive) for employee stock ownership plan or equity incentive. The equity incentive plan shows the management’s confidence in the company’s future development prospects and is conducive to fully mobilize the enthusiasm of the company’s core technicians and key employees.
With the implementation of the 14th five year plan and the superposition of genuine industrial software and domestic substitution, the industrial software industry is expected to usher in a business cycle: in November 2021, the 14th five year plan of the Ministry of industry and information technology was released, 31 provinces and cities also issued local government work reports in 2022, and many provinces and cities took industrial software as the core research field. In December 2021, the National Copyright Administration issued the “14th five year plan” for copyright work, which explicitly included industrial design software into the scope of software legalization. With the intensification of Sino US trade friction, the importance of localization of core technologies is becoming more and more prominent. Domestic substitution will become a long-term trend in the industrial software industry.
Profit forecast and Valuation: considering that the large-scale application of 3dcad and CAE still takes time, the company’s revenue forecast for 22-23 years is reduced to 842 / 1128 million yuan, which is – 5.18% / – 5.69% compared with the previous forecast, and the new 24-year revenue forecast is 1.502 billion yuan; The forecast of the company’s net profit attributable to the parent company for 22-23 years was lowered to 221 / 292 million yuan, which was – 12.65% / – 14.12% compared with the previous forecast, and the forecast of net profit attributable to the parent company for 24 years was 388 million yuan. The corresponding EPS of 22-24 years is 3.57/4.72/6.27 yuan respectively, and the corresponding PE is 57x / 43x / 33x respectively.
Risk tip: the company’s product expansion is less than expected, and the implementation of policies is less than expected.
