\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
Matters:
The company announced in its 2021 annual report that in 2021, it achieved an operating revenue of 619 million yuan, a year-on-year increase of 35.65%, and a net profit attributable to the parent company of 182 million yuan, a year-on-year increase of 50.89%. The profit distribution plan for 2021 is: it is proposed to allocate 10 yuan (including tax) for every 10 shares, and the capital reserve will not be converted into share capital.
Ping An View:
The company’s revenue increased rapidly in 2021. In 2021, the company’s operating revenue was 619 million yuan, with a year-on-year increase of 35.65%, and the revenue achieved rapid growth. Among them, 2dcad product revenue was 441 million yuan, a year-on-year increase of 31.39%; 3dcad product revenue was 138 million yuan, a year-on-year increase of 25.47%; The revenue of CAE products was 3.8275 million yuan, with a year-on-year jump growth. The net profit attributable to the parent company was 182 million yuan, a significant increase of 50.89% year-on-year, mainly due to the increase of operating income, government subsidies included in the current profit and loss and financial management income over the same period of last year. Excluding the impact of non recurring profit and loss, the net profit deducted by the company from non parent company was 994038 million yuan, with a year-on-year increase of 4.16%, and the net profit deducted from non parent company achieved steady growth.
The gross profit margin of the company decreased slightly year-on-year, the expense rate increased year-on-year, and the R & D investment continued to strengthen. The gross profit margin of the company in 2021 was 97.87%, a slight decrease of 0.89 percentage points year-on-year. During 2021, the company’s expense rate was 84.86%, an increase of 3.28 percentage points year-on-year, mainly because the company continued to strengthen the construction of marketing system, expand and optimize marketing channels and carry out marketing activities in multiple directions, and the sales expense rate increased by 3.36 percentage points year-on-year. In 2021, the company adhered to independent R & D and continued to increase the R & D efforts of 2dcad, 3dcad and CAE. The R & D investment was 203 million yuan, with a year-on-year increase of 34.23%. The revenue of R & D investment accounted for 32.79%, maintaining a high level of more than 30%. The net operating cash flow of the company in 2021 was RMB 187million, which was equivalent to the net profit attributable to the parent company in the current period. The company’s profit quality was good.
The company has made breakthroughs in core technology and continuously improved the market competitiveness of products. In 2021, in the field of 2dcad, the company released a new version of Zhongwang cad2022, which improved the operation efficiency and stability of the platform, added more intelligent operations, and brought users a faster and more stable design experience. In the field of 3dcad, the company released Zhongwang 3d2022x version to improve the high-quality surface modeling ability, consolidate the parametric design ability, improve the efficiency of large-scale assembly design, and enrich more industry toolsets to match the increasingly complex design challenges of users and provide strong support for speeding up the product design and development cycle of enterprise users. In the field of CAE, the company has released a general pre-processing and post-processing platform zwmeshworks2022, on which developers can easily carry out secondary development and integrate multidisciplinary solvers, laying an important foundation for flexible customization of CAE software; In addition, the company also released the finite element structural simulation analysis software zwsim structural 2022 and electromagnetic simulation software zwsim-em2022. In terms of market promotion, the application of 2dcad products in construction, landscape, survey and mapping, municipal planning, machinery manufacturing, ship construction and other industries is deeply recognized by the majority of users; 3dcad products have been continuously recognized by customers through fine two-way grinding and iteration with lighthouse customers; The ability of the company’s CAE series products has gradually reached the commercial level of availability, and has obtained preliminary verification and customer recognition in the commercial market. With the continuous iteration of the company’s new version products, the market competitiveness of the company’s products continues to increase. Driven by intelligent manufacturing, legalization and localization, as a leading enterprise in China’s domestic R & D and design industrial software, the company’s 2dcad, 3dcad and CAE product business has broad prospects for development in the future.
Profit forecast and investment suggestions: according to the company’s 2021 annual report, we adjusted the performance forecast and estimated that the net profit attributable to the parent company from 2022 to 2024 would be 237 million yuan (the previous value was 282 million yuan), 318 million yuan (the previous value was 406 million yuan) and 435 million yuan (New), and EPS would be 382 yuan, 513 yuan and 702 yuan respectively. The PE corresponding to the closing price on April 12 would be 53.9, 40.2 and 29.4 times respectively. The company is a leading enterprise in China’s domestic R & D and design industrial software. The performance of 2dcad products has been comparable to the products of the first camp enterprises in the CAD field represented by international well-known companies, and has the ability of localization and substitution in China’s 2dcad market. The company’s 3dcad products have a rare independent geometric modeling core in China, and are expanding from the fields of mechanical parts to more complex design scenarios such as aerospace and automobile. At the same time, the capacity of the company’s CAE series products has gradually reached the commercial level, and CAE products are expected to become another growth point of the company’s future performance. Driven by intelligent manufacturing, legalization and localization, the company’s business ushered in a good opportunity for development. We are optimistic about the future development of the company and maintain the “recommended” rating of the company.
Risk tips: (1) the development progress of software legalization is lower than expected. At present, the work of software legalization led by the Chinese government continues to advance, and has achieved remarkable results in institutions affiliated to central and state organs and central enterprises. In the future, the enterprise will be an important market for software legalization. Because the company’s products have strong tool software attributes, if the development progress of enterprise software legalization in the future is lower than expected, it will affect the expansion of the company’s business. (2) The company’s 3dcad product performance improvement progress did not meet expectations. The company’s 3dcad has certain competitive advantages in mechanical parts and other fields, but it can not meet the 3D design scenes with high accuracy and high complexity such as aerospace and automobile, and the company’s 3D CAD products still have great room for improvement. If the company’s 3dcad products cannot be continuously iterated and updated, and the progress of product performance improvement is lower than expected, it will affect the expansion of the company’s 3dcad products to high complexity design scenarios, and the company’s 3dcad business will face the risk of development not meeting expectations. (3) The development progress of the company’s CAE business did not meet expectations. The ability of the company’s CAE series products has gradually reached the commercial level of availability, and has obtained preliminary verification and customer recognition in the commercial market. However, if the market acceptance of CAE series products is lower than expected, there will be a risk that the development of the company’s CAE business will not meet expectations.
