\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 48 Shenzhen Sunline Tech Co.Ltd(300348) )
Event: on the evening of April 14, 2022, the company released its annual report for 2021, realizing a revenue of 1.572 billion yuan, a year-on-year increase of 1.37%; The net profit attributable to the parent company was 126million yuan, a year-on-year decrease of 46.73%; Deduction of net profit not attributable to the parent company was 106 million yuan, a year-on-year decrease of 52.60%.
The business expansion of big banks continued to advance, and the big data business contributed the main growth power. By product: 1) the revenue of digital financial business solutions in 2021 was 687 million yuan, a year-on-year decrease of 26.4%. The company has won the bid for core system projects of several heavyweight customers. 2) The revenue of big data application system solutions was 536 million yuan, a year-on-year increase of 36.8%. In 2021, the company won the bid of Bank Of China Limited(601988) and other large banks and joint-stock banks, and the number of large customers increased by 92% year-on-year; Cooperate with Pan financial customers such as Ping An Group; Actively explore overseas markets such as Southeast Asia. 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. 3) The revenue of the whole financial value chain business management solution was 201 million yuan, a year-on-year increase of 9.0%.
The cooperation with leading banks continued to deepen, and the results of business upgrading are worth looking forward to. Large bank customers have higher requirements for the company’s project management and personnel quality, and the project implementation cycle is long, resulting in the failure of the company’s revenue side to reflect the results in time; Affected by the investment in the early stage of the project and the increase of employee costs (the number of employees of the company increased from 5577 to 6479 in 2021), the profit is under pressure in the short term. As the company and the head bank build trust with each other and gradually adapt to the model, the gross profit margin is expected to rise. At the same time, in the practice of deeply participating in the construction of the new core and other systems of the bank, the company innovated the new project methodology implemented by the bank system and created a professional team with new thinking to meet the higher requirements and challenges of the bank’s projects, and the subsequent performance is expected to gradually return to a good growth track.
The promotion of financial information innovation is accelerated, and the company is expected to benefit in depth. In January 2022, the central bank and other departments issued the 14th five year plan for the development of financial standardization, which further expanded the influence of financial information and innovation. The company is expected to rely on years of technology accumulation, give full play to the advantages of independent innovation and core system, and grasp the development opportunities of information innovation in the industry; In addition, through the continuous cooperation with the head bank and excellent ecological partners such as Huawei, Tencent, jd.com and Inspur, the company has created a number of benchmark cases of information innovation in the banking industry. Combined with the new technologies under the tide of the times, the product technical strength has been continuously consolidated, which is expected to deeply benefit from the information innovation and digital transformation and development of China’s financial industry.
Profit forecast: taking into account the long project cycle and rising staff costs of the bank, the company lowered its revenue forecast for 22-23 years to 2.196/2.735 billion yuan (the adjustment range is – 11.84% / – 8.34%), and increased its forecast for 24 years to 3.354 billion yuan; The forecast of net profit attributable to the parent company for 22-23 years was lowered to 203 / 254 million yuan (the adjustment range was – 48.61% / – 46.97%), and the 24-year forecast was 312 million yuan; EPS in 22-24 years is 0.28/0.35/0.43 yuan respectively, corresponding to pe40x / 32x / 26x; Considering the leading position of the company in the industry under the stable competition pattern, the long-term positive trend remains unchanged, and the “overweight” rating is maintained.
Risk warning: the promotion of Xinchuang is not as expected; The application of financial technology scenarios fell short of expectations; Intensified market competition
