\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
Event: on the evening of April 15, 2022, the company released the first quarterly report of 2022. In the first quarter of 2022, the operating revenue was 86 million yuan, a year-on-year increase of 1.24%, and the net profit attributable to the parent company was -19 million yuan, a year-on-year increase of -440.78.
The impact of the epidemic has brought periodic pressure on quarterly performance. The upgrading of overseas channels is gradually implemented, and it is expected to achieve initial results within the year. In the first quarter of 2022, with the new round of epidemic brought by Omicron, the company’s performance received periodic suppression: 1) China’s commercial market: since 2021q4, the company has adopted the sales strategy of comprehensively sinking localized services and focusing on key customers. The epidemic has hindered business visits in main business areas, with a year-on-year increase of 20.3% in 2022q1, which is in line with expectations. 2) Education market: affected by the epidemic, most Chinese schools are closed and controlled, making it difficult to carry out education business, and the income remains stable year-on-year. 3) Overseas business: the company’s overseas channel upgrading strategy is gradually implemented, and the impact of the epidemic and the international situation has brought marginal disturbance, resulting in a certain year-on-year decline in 2022q1 overseas business. We expect that with the continuous upgrading of overseas channels, it is expected to achieve initial results this year.
Growth driving force: domestic substitution brings short-term flexibility, CAX integration drives medium-term growth, and SaaS cloud transformation in the long run. In the short term, China is a fertile land for the cultivation of industrial software. The company’s products have obvious cost performance advantages and cover only 1% of the target customers. Domestic substitution and software legalization bring development flexibility. The epidemic in 2020 constitutes a short-term obstacle to globalization. In the medium term, take the giant as an example to promote the CAX integration strategy. From the perspective of the raising and investment direction of IPO funds, CAD / CAE / CAM have corresponding capital investment layout. The accumulation of industry know-how will lead to a deeper moat of corporate competition, and the further enrichment of downstream customer groups will also reduce the impact of downstream cyclical fluctuations on corporate income. In the long run, the company will promote the transformation of SaaS cloud, but it is not a top priority. At present, there is still a certain gap between the company’s products and the world’s first tier giants (especially 3dcad products). The opponent’s cloud transformation also provides an opportunity for the company to seize market share through product cost performance to a certain extent.
Maintain the “buy” rating. We expect the company’s 2022e / 23e / 24E to achieve operating revenue of 835 / 1120 / 1487 million yuan respectively, with a year-on-year increase of 35% / 34% / 33%; The net profit attributable to the parent company was 224 / 323 / 419 million yuan, with a year-on-year increase of 24% / 44% / 30%, maintaining the “buy” rating.
Risk warning: macroeconomic downside risk; The risk that the R & D input and output is less than expected; Intellectual property risk; The risk of continuous negative impact of the epidemic; There is risk of error in calculation and assumption.
