\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
Event: on the evening of April 11, 2022, the company released the annual report of 2021. The operating revenue in 2021 was 618680700 yuan, with a year-on-year increase of 35.65%; The net profit attributable to the owners of the parent company was 181650200 yuan, a year-on-year increase of 50.89%; The net profit attributable to shareholders of the parent company after deducting non recurring profits and losses was 994038 million yuan, an increase of 4.16% year-on-year.
The 2D business is growing rapidly, the 3D business is gradually entering the harvest period, and the overseas business is expected to recover gradually. 1) In 2022, the company’s 2D / 3D CAD software revenue growth rate reached 31.4% / 25.5% respectively. The 2D business grew rapidly, and the 3D business continued to grow steadily. With the continuous breakthrough of technological breakthrough, it is expected to gradually enter the harvest period. 2) In 2022, the company made a significant breakthrough in the construction of foreign distribution channel network, and the number of new cooperative channels was more than twice that of previous years. At the same time, the company actively promotes business localization layout and has established local business and support teams in strategic markets such as the United States, Vietnam and Japan, which can go deep into the market and industry more efficiently. As the impact of the overseas epidemic gradually subsides, we expect the company’s overseas business to gradually recover in 2022.
The gross profit margin remained high and the cash flow performance was healthy and stable, which once again verified the effectiveness of the company’s bargaining power and payment collection strategy. 1) In 2021, the company’s gross profit margin was about 97.87%, which remained high as always, reflecting the advantages of the company as a pure software enterprise business model. 2) In 2022, the net operating cash flow reached 187 million yuan, with a year-on-year increase of 24.4%. This is the result of the company’s strategy of continuously improving products, strengthening multi-form and multi-channel content marketing and advertising in 2021. At the same time, it also reflects the effectiveness of the company’s policy of strengthening sales collection of key customers.
The expansion of sales channels has put pressure on delirun end in stages, and continued to expand the moat with high R & D investment. 1) In 2021, the company continued to strengthen the construction of marketing system, expand and optimize channels, and strengthen the transformation of direct sales team to key customer mode, resulting in a significant increase in sales expenses. The company’s sales expense ratio reached 43.1%, an increase of 3.36 PCT over 2020; The management fee rate is about 9.0%, an increase of 0.8 PCT compared with 2020; The financial expense rate is basically the same as that in 2020. Channel reform and expansion and equity incentive fees have brought phased pressure on the profit side of the company. We expect that this pressure will be gradually digested in the future. 2) In 2022, the total investment of R & D expenses reached 2028957 million yuan, with a year-on-year increase of 34.23%, which is used for continuous grinding of 2D products and continuous technical research in 3D field. At present, the product performance has been gradually recognized by lighthouse customers, and the scope and depth of application are also expanding. We expect that the 3D product power of the company will continue to improve and be further recognized by the market in the future.
Growth driving force: domestic substitution brings short-term flexibility, CAX integration drives medium-term growth, and SaaS cloud transformation in the long run. In the short term, China is a fertile land for the cultivation of industrial software. The company’s products have obvious cost performance advantages and cover only 1% of the target customers. Domestic substitution and software legalization bring development flexibility. The epidemic in 2020 constitutes a short-term obstacle to globalization. In the medium term, take the giant as an example to promote the CAX integration strategy. From the perspective of the raising and investment direction of IPO funds, CAD / CAE / CAM have corresponding capital investment layout. The accumulation of industry know-how will lead to a deeper moat of corporate competition, and the further enrichment of downstream customer groups will also reduce the impact of downstream cyclical fluctuations on corporate income. In the long run, the company will promote SaaS cloud transformation, but it is not a top priority. At present, there is still a certain gap between the company’s products and the world’s first tier giants (especially 3D CAD products). The opponent’s cloud transformation also provides the company with the opportunity to seize market share through product cost performance to a certain extent.
Maintain the “buy” rating. We expect the company’s 2022e / 23e / 24E to achieve operating revenue of 835 / 1120 / 1487 million yuan respectively, with a year-on-year increase of 35% / 34% / 33%; The net profit attributable to the parent company was 224 / 323 / 419 million yuan, with a year-on-year increase of 24% / 44% / 30%, maintaining the “buy” rating.
Risk warning: macroeconomic downside risk; The risk that the R & D input and output is less than expected; Intellectual property risk; The risk of continuous negative impact of the epidemic; Risk of error in calculation and assumption
