\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 65 Global Infotech Co.Ltd(300465) )
Key investment points
Benefiting from the new investment cycle of bank it and financial information innovation, the revenue increased rapidly, and the performance turned loss into profit.
In 2021, benefiting from the new round of financial technology investment cycle and the acceleration of financial information innovation, the company achieved a revenue of 2.279 billion yuan, a year-on-year increase of 20%. Revenue growth was accompanied by effective cost control. In 2021, the sales expense ratio and management expense ratio decreased by 0.72 PCT and 0.38 PCT respectively, realizing a net profit attributable to the parent company of 124 million yuan. After a one-time provision for goodwill impairment of 778 million yuan and a significant loss in 2020, the performance returned to normal.
Software development increased by 50% at a record high speed, integration developed rapidly, and cash flow fluctuated in the short term.
In 2021, the revenue structure was further optimized, and the financial technology business realized a revenue of 2.122 billion yuan, a year-on-year increase of 35%, accounting for 93%. Among them, the software development business was 923 million yuan, a year-on-year increase of 50%, a record high over the years, and the revenue of system integration business was 1.199 billion yuan, a year-on-year increase of 25%. Due to the payment of a large amount of integrated procurement funds, the operating cash flow in 2021 was - 84.87 million yuan, a year-on-year decrease of 137%.
With the superposition of industrial cycle, localization and system demand changes, the CAGR of software business is expected to exceed 25% in the future.
Benefiting from the renewal cycle of the banking system, the new demand for system performance brought by business mobility and Internet, and the information innovation policy under the influence of the international situation, the bank will continue to increase investment in science and technology and gradually migrate to the distributed system architecture. The mature system of large banks is expected to be promoted to small and medium-sized banks. With rich product experience and deep cooperative relationship between CCB and Jinke, the compound growth rate of software development and service business is expected to exceed 25% in the next three years.
Profit forecast and valuation
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 206 million yuan, 250 million yuan and 299 million yuan respectively, with a year-on-year growth rate of 66%, 21% and 20%, and EPS of 0.46, 0.56 and 0.67 yuan, corresponding to 24, 20 and 16 times of the current share price PE. Give the company 35 times of the target PE in 2022, corresponding to the total market value of 7.2 billion and the target price of 16.12 yuan, with an increase space of 47.72%, maintaining the "buy" rating.
Risk tip 1. The bank's IT investment is less than the expected risk; 2. Business and talent competition risks.
