\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 48 Shenzhen Sunline Tech Co.Ltd(300348) )
The company released its annual report for 2021. The company achieved an operating revenue of 1.572 billion yuan, a year-on-year increase of 1.37%, a net profit attributable to the parent of 126 million yuan, a year-on-year decrease of 46.73%, and a net profit not attributable to the parent of 106 million yuan, a year-on-year decrease of 52.60%. The performance is lower than the market expectation.
Key investment points
The big data business grew rapidly and the customer coverage was further expanded: in 2021, the company’s big data application system solution business revenue was 536 million yuan, a year-on-year increase of 36.75%, and the amount of sales contracts signed increased by more than 26%. By the end of 2021, the company’s big data business line has achieved 100% coverage of policy banks, 83% coverage of state-owned banks, 92% coverage of joint-stock banks, 89% coverage of urban commercial banks with assets of more than 500 billion and 71% coverage of rural commercial banks with assets of more than 500 billion, comprehensively broadening the cooperation with customers. In 2022, the company will further improve the gross profit margin of big data business by optimizing personnel structure and improving the maturity of competitive innovative products in the data field in the process of strengthening the strategic investment of big bank customers.
The business of large banks has passed the initial running in period, and the significant improvement of recognition will bring benchmarking effect: in 2021, the company’s business went deep into large banks and did not adapt to the initial stage of cooperation with large banks. After the company invested high-quality personnel to meet the needs of large banks, it has been gradually recognized by large banks. In this process, a large number of talents adapted to the needs of large banks have been cultivated, and the team’s business ability, product ability and project management ability have been tempered. The relationship between the company and big banks will be further improved in 2022, which will bring benchmarking effect. At the same time, the process of cooperation with Dahang enables the company to precipitate management and technical experience into new product solutions, further create competitive products and consolidate the technical leading advantage of the company’s products.
Overseas business continued to improve, and the development strategy achieved phased results: the overall overseas business achieved profits, and the business development trend continued to improve. In 2021, the sales contract of overseas business increased by more than 95% year-on-year, and the revenue increased by 65% year-on-year. The company made breakthroughs in the top five banks in major Southeast Asian countries such as Thailand, Malaysia and Indonesia, and the average bid winning rate of ICORE core system in Southeast Asian market was more than 25%, It is one of the few Chinese fintech companies that have really cut into overseas products by defeating overseas competitors one after another.
The bank’s business coverage has been improved rapidly, and the subsequent profit margin is expected to be improved rapidly. Considering that the company may increase the cost of expanding large bank business in the early stage, we lowered the forecast net profit attributable to the parent company from 2022 to 2023 to 152 (- 2.49) and 179 (- 326) million yuan, and the net profit attributable to the parent company in 2024 is expected to be 205 million yuan, maintaining the “buy” rating.
Risk tip: the growth rate of IT industry in banks is lower than expected; The company’s business development is less than expected; Overseas market policy risk.
