\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
[key points of investment]
The annual growth rate was high, and the net profit was basically in line with expectations. The company released its 2021 annual report. In 2021, it achieved a revenue of 619 million yuan, a year-on-year increase of 35.65%, slightly lower than previously expected. The domestic commercial market revenue was 357 million yuan, with a year-on-year increase of 29.61%. The domestic education market revenue was 150 million yuan, with a year-on-year increase of 72.06%. The growth of the commercial market was slightly lower than expected. In the whole year, the net profit attributable to the parent company was 182 million yuan, a year-on-year increase of 50.89%, and the net profit growth was basically in line with previous expectations. The non net profit deducted was 99 million yuan, a year-on-year increase of 4.16%. Net operating cash flow was 187 million yuan, a year-on-year increase of + 24.44%. 21q4 achieved a revenue of 262 million yuan in a single quarter, a year-on-year increase of + 37.48%, faster than 21q3. In Q4, the net profit attributable to the parent company and the net profit deducted from non net profit in a single quarter were 83 million yuan and 56 million yuan respectively.
Both R & D and direct sales have achieved high growth. In 2021, the gross profit margin was 97.87%, with a year-on-year increase of -0.89pct, and the operating cost increased by 132.55% year-on-year. The substantial increase of operating cost was mainly due to ① the increase of entrusted development and technical service revenue; ② Some large orders from new customers involve purchased products. In terms of marketing strategy, the company strengthened the transformation of direct selling team to key customer mode, deeply penetrated the second tier city market, improved the service efficiency of the original factory, launched the “Honghu plan”, actively absorbed dealers and supported the cultivation of a number of dealer teams with annual sales of more than one million. The revenue of direct selling and distribution mode increased by 35.92% and 36.12% respectively year-on-year. In the whole year, a total of 267 million yuan (+ 47.09%) of sales expenses, 56 million yuan (+ 47.62%) of management expenses and 203 million yuan (+ 34.23%) of R & D expenses were incurred.
The rapid growth of the education market is conducive to cultivating long-term user groups. In terms of product structure, 2dcad products generated revenue of 441 million yuan (+ 31.39%), 3dcad products generated revenue of 138 million yuan (+ 25.47%), CAE products generated revenue of 3.83 million yuan, and the three product lines achieved steady growth. Among them, 2D education products and 3D education products increased by 51.29% and 49.77% respectively year-on-year. The education market is one of the main engines of performance growth. The company provides schools with artificial intelligence education solutions of “Tools + content + training + platform + services” to support the implementation of AI education in 27 provinces and cities. The company’s 3doneai solution products have entered 24 national or provincial textbooks in 18 provinces, constantly strengthening school enterprise cooperation, High coverage in the field of education is conducive to cultivating long-term user groups.
Release the repurchase plan to demonstrate the company’s confidence. The company announced the repurchase plan and plans to repurchase the company’s shares in the form of centralized bidding transaction. The total repurchase funds shall not be less than 30 million yuan (inclusive) and not more than 60 million yuan (inclusive). The source of funds is the company’s over raised funds, and the repurchase price shall not exceed 350 yuan / share. This repurchase plan fully demonstrates the company’s confidence in future development. As a leading enterprise in the research and development of design industrial software in China, the company has core technical capabilities and is expected to step up to a new level of development under the two thrust of localization and digitization.
[investment suggestions]
The company is a leading enterprise in the research and development of design industrial software in China. It is expected to step to a new level of development under the joint promotion of localization and digitization. As the domestic commercial market expansion still needs patience, we slightly lowered the profit forecast for 20222023 and introduced the profit forecast for 2024. It is estimated that from 2022 to 2024, the company’s operating revenue will be 830 / 1117 / 1510 million yuan respectively, the net profit attributable to the parent company will be 228 / 301 / 408 million yuan respectively, the EPS will be 3.67/4.85/6.58 yuan respectively, and the corresponding PE will be 55 / 41 / 31 times respectively, maintaining the “overweight” rating.
[risk tips]
Market competition intensifies risks;
Risk of changes in policy support;
The risk of technology R & D falling short of expectations;
Risk of losing key customers.
