\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
Main points:
Event overview
Zwsoft Co.Ltd(Guangzhou)(688083) issued the 2021 annual report on April 11. In this year, the company achieved an operating 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%; The net profit deducted from non parent company was 99 million yuan, with a year-on-year increase of 4.16%.
The growth rate of revenue is in line with expectations, and the profit of sales channel expansion is under pressure
On the revenue side, under the background of digital transformation of manufacturing industry, clear trend of legalization and accelerated domestic substitution of industrial software, the company continued to promote the all in one CAX strategy and its main business continued to expand. In terms of business, 2D / 3D CAD business achieved revenue of 441 / 138 million yuan respectively, with a year-on-year increase of 31.39% / 25.47%. In terms of market, the company formed a promotion force through design competitions, cooperative education projects, vocational certificate training and other means, promoted the embedding of product matrix into innovative education, and achieved a business revenue of 150 million yuan in the domestic education market throughout the year, with a year-on-year increase of 73.06%. On the profit side, while the revenue increased, the government subsidies and financial management income superimposed into the current profit and loss increased year-on-year, and the year-on-year growth rate of net profit attributable to the parent was as high as 50.89%. On the other hand, affected by the expansion of sales channels and the increase of marketing activities, the company’s sales expense ratio and management expense ratio increased by 3.36pct and 0.74pct respectively, resulting in a decrease in the year-on-year growth rate of net profit not attributable to parent company, which was 4.16%.
Expand the core technology of cloud products
This year, the company maintained high R & D investment, and the R & D expense rate was 32.79%. In the field of CAD, this year, the company broke through a number of industry technology card points, continuously polished the existing software to improve its accuracy, efficiency and compatibility, and strengthened the secondary development attribute, laying the foundation for in-depth adaptation for multiple industries. In addition, it also realizes the seamless migration of mechanical drawings designed by other software, and improves the ease of use of the software. In the field of CAE, the company released Zhongwang simulation 2022 at the end of the year, including a variety of self-developed simulation software such as electromagnetic simulation and structural simulation, and its maturity and market recognition have increased significantly. The company established the cloud business division this year. In the future, relying on the existing overdrive geometric modeling engine technology and the accumulation of existing 2D / 3D CAD products, the company will start to develop a new generation of cloud CAD products, which is deeply in line with the industry trend of cloud, platform and SaaS.
Significant breakthroughs have been made in overseas channels, and domestic substitutes have maintained a high boom
The construction of the company’s foreign distribution channel network has made a significant breakthrough. The number of new cooperative channels is more than twice that of previous years. This year, the company achieved overseas revenue of 110 million yuan, a year-on-year increase of 20.71%. At the same time, the company actively promotes the localization layout of overseas business and has established support teams in strategic markets such as the United States, Vietnam and Japan to strengthen online marketing, remote technical support and remote R & D to support the growth of overseas business. In China, the company actively sought channel sinking and expanded its business in the second tier market. The annual domestic revenue was 507 million yuan, a year-on-year increase of 39.82%. Industrial R & D and design software, as one of the foundations of China’s manufacturing digital transformation, is expected to continue to expand with the deepening of digital transformation. According to iResearch consulting data, China’s CAD market is expected to reach 6.7 billion yuan in 2023, with CAGR of 23.3% in recent five years. We believe that with the continuous acceleration of domestic substitution and the continuous improvement of copyright laws and regulations, the company is expected to consolidate the leading position of China’s track by virtue of high R & D investment and forward-looking channel deployment, and catch up with international front-line enterprises by relying on localization advantages.
Investment advice
Affected by the digital transformation of industrial research and design, the company’s main business is expected to maintain a high boom. In the future, with the completion of the sales channel, the channel sinking gain will appear, and the company’s revenue and net profit are expected to usher in rapid growth. We expect the company to achieve revenue of 850 / 1152 / 1546 million yuan from 2022 to 2024, with a year-on-year increase of 37.4% / 35.6% / 34.2%; The net profit attributable to the parent company was 227 / 303 / 393 million yuan, with a year-on-year increase of 25.0% / 33.6% / 29.5%, maintaining the “buy” rating.
Risk tips
1) R & D breakthrough is less than expected; 2) Policy support is less than expected; 3) Project delivery was less than expected.
