\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 03 Beijing Compass Technology Development Co.Ltd(300803) )
Event overview
The company released the first quarterly report of 2022. During the reporting period, the company achieved a revenue of 623 million yuan, a year-on-year increase of 89.51%; The net profit attributable to the parent company was 267 million yuan, a year-on-year increase of 176.5%; The non net profit deducted was 264 million yuan, a year-on-year increase of 180%. The gross profit margin increased by 4.21pct to 94.01%. The net operating cash flow was 550 million yuan, a year-on-year increase of 141.5%. The basic earnings per share of the company was 0.66 yuan, a year-on-year increase of 175.0%.
Analysis and judgment:
The company has become the reorganization investor of Wangxin securities, and the reorganization process is progressing smoothly.
On February 10, 2022, the company was identified as the bankruptcy reorganization investor of Wangxin securities. On the evening of March 16, the company announced that as the reorganization investor of wechat securities, the company plans to pay RMB 1.5 billion in cash to the manager of wechat securities to pay off the debts of wechat securities, and hold 100% equity of wechat securities after the reorganization is completed. On the evening of March 28, the company issued an announcement, and the company received the notice from the manager that the draft reorganization plan deliberated and voted at the second creditors’ meeting of wechat securities was adopted. On April 1, the company held an extraordinary general meeting of shareholders, which deliberated and approved the major asset restructuring of the company.
We believe that if the company successfully acquires wechat securities, on the one hand, it will help to broaden the company’s customer acquisition channels. On the other hand, the company will transform into an Internet brokerage, and the company will obtain business qualifications such as fund consignment and asset management, which will greatly enhance the company’s professional ability to provide wealth management for customers and open a new revenue growth curve.
The financial information service business has grown rapidly, and customers’ willingness to pay and loyalty have continued to improve.
In the first quarter of 2022, the CSI 300 index fell by 14.53% in total, with weak profit-making effect; However, the average daily turnover of the two cities in the first quarter still exceeded trillion, which represents that the trading sentiment is still, which is also the reason for the rapid growth of the company’s financial information service business. On the one hand, the company’s customers are mainly individual investors and have a strong demand for financial information software; On the other hand, the company adopts experiential marketing to implement accurate sales to users, and customers’ willingness to pay and loyalty continue to improve.
During the reporting period, the company’s cash inflow from operating activities increased by 184.6% year-on-year to RMB 801 million, the contract liabilities increased by 16.13% year-on-year to RMB 47.67 million, and the company’s other non current liabilities increased by 26.86% year-on-year to RMB 631 million. Judge that the company’s financial information service business will continue to grow in the future. In addition, as the company provides customers with more wealth management services through the acquisition of full license securities firm Wangxin securities, the payment conversion rate of the company’s customers is expected to be further improved; Superposition company continues to increase advertising and expand user pool, and the number of paying users of the company will grow steadily.
Lightweight and online will become the only way for the development of wechat securities.
Wangxin securities was founded in 1995 and headquartered in Shenyang. Since the occurrence of risk events in 2018, it has been rated as class D for three consecutive years from 2019 to 2021. If Beijing Compass Technology Development Co.Ltd(300803) successfully acquires wechat securities and injects its own Internet gene into wechat, in the future, wechat securities is expected to build innovative financial service products for b-end / C-end customers, accurately match customers’ needs based on intelligent trading, intelligent wealth management, intelligent services and asset analysis, realize intelligent upgrading in market data, trading tools and other aspects, and provide one-stop convenient service tools for investors’ decision-making.
Investment suggestion considering the rapid growth of the company’s financial information service business in the first quarter, we raised our profit forecast. We expect the company to achieve operating revenue of RMB 1.605/24.26/3.222 billion from 2022 to 2024 (the original forecast was RMB 1.331/19.56/2.841 billion), with a year-on-year increase of 72.1% / 51.2% / 32.8% (the original forecast was 42.7% / 47% / 45%) respectively; From 2022 to 2024, the net profit attributable to the parent company was RMB 395 / 567 / 823 million (the original forecast was RMB 280 / 441 / 607 million), with a year-on-year increase of 86.8% / 72% / 69.6% (the original forecast was 58.9% / 57.4% / 37.8%); From 2022 to 2024, the EPS was 0.98/1.4/2.03 yuan (the original forecast was 0.69/1.09 yuan / 1.5 yuan), and the PE corresponding to the closing price of 41.15 yuan on April 14, 2022 was 42x / 29x / 20x respectively, maintaining the “buy” rating.
Risk tips
1) the promotion of medium and high-end products is less than the expected risk; 2) The risk that the research and development of new products and new functions is less than expected; 3) Risk of market share decline due to intensified industry competition; 4) The acquisition of Wangxin securities has not been completed and there is uncertainty.
