\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
Event: on April 11, 2022, the company released the annual report of 2021 and the share repurchase plan of the company.
The company’s annual performance is in line with market expectations. According to the company’s announcement, the company achieved an annual revenue of 619 million yuan in 2021, with a year-on-year increase of 35.64%; The net profit attributable to the parent company was 181 million yuan, a year-on-year increase of 50.67%; The net profit deducted from non parent company was 99 million yuan, with a year-on-year increase of 3.87%. The company is still in the stage of high R & D investment, and the overall performance is in line with market expectations.
Products continue to iterate and industrial integration continues to strengthen. According to the first batch of “China National Petroleum and chemical technology development center” in 2021. According to the disclosure of Southern Metropolis Daily, the company has led 11 major member units such as the Fifth Institute of electronics of the Ministry of industry and information technology to establish Guangdong Industrial Software Innovation Center to further strengthen collaborative innovation. On the other hand, according to the announcement, the company released the latest 2022 versions of 2dcad, 3dcad and CAE products respectively during the reporting period, and launched the Linux version suitable for Xinchuang software and hardware. The company has strengthened industrial coordination as a whole and continued to move forward on the “all in onecax” Avenue.
The repurchase plan shows development confidence, and the localization and replacement of industrial software is full of potential. According to the announcement of the company, the company plans to buy back the company’s shares in the form of centralized bidding transaction, and the total amount of repurchase funds shall not be less than 30 million yuan (inclusive) and not more than 60 million yuan (inclusive). We believe that the company’s repurchase plan fully demonstrates its confidence in development. According to the relevant data of the National Bureau of statistics, China’s manufacturing output value surpassed the United States for the first time in 2010 and has ranked first in the world for many consecutive years. With the relevant policies such as made in China 2025, the upgrading of China’s manufacturing industry has become an irreversible trend. Under the background of increasing investment in independent R & D in the manufacturing industry, the demand for industrial design software is expected to increase significantly. On the other hand, with trade uncertainty, in order to prevent the upgrading process of China’s manufacturing industry from being blocked, the autonomy of industrial design software is one of the ways to effectively avoid the phenomenon of “neck sticking”, and localization replacement is full of potential.
Investment suggestion: the company is a leading enterprise of industrial design software that is extremely scarce in China. Its core product CAD design software is gradually opening up the situation through market competition, and is expected to gradually become bigger and stronger by taking advantage of localization. It is estimated that the company’s EPS from 2022 to 2024 will be 4.00 yuan, 5.18 yuan and 6.76 yuan respectively, and the corresponding PE will be 51x, 40x and 30x respectively, maintaining the “recommended” rating.
Risk tip: the company’s product R & D progress is less than expected, and the intensification of industry competition leads to the decline of gross profit margin
