\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 48 Shenzhen Sunline Tech Co.Ltd(300348) )
Key elements of the report:
The company issued its annual report for 2021. In 2021, the company achieved an operating revenue of 1.572 billion yuan, a year-on-year increase of 1.37%; The net profit attributable to the parent company was 126 million yuan, a year-on-year decrease of 46.73%; The net profit deducted from non parent company was 106 million yuan, a year-on-year decrease of 52.60%.
Key investment points:
The large investment in the running in period of big banks’ business has led to short-term pressure on Performance: the growth rate of the company’s revenue is low, and the net profit attributable to the parent company has declined, mainly due to the company’s strong participation in the information innovation projects of state-owned big banks, and the large cost consumption in the early investment and the running in period. Large bank customers have higher requirements for product functions, project delivery quality, management process and employee ability, and the impact on performance is reflected in three aspects: 1) the business project acceptance cycle is long, the approval process is long, and the company’s large bank revenue under the final inspection method has not been recognized in 2021, which has dragged down the growth of the company’s overall revenue. From the ending inventory of 511 million, a year-on-year increase of + 48.72% can also prove that the amount of unrecognized revenue of the company is large. 2) Due to the fierce competition in Xinchuang’s market, the company has made certain profits in the quotation in order to obtain the large bank project. 3) In order to enhance the competitiveness of products and services, the company has increased investment in high-end personnel. The total number of employees is + 16.17% year-on-year, and the per capita salary is + 14.91% year-on-year, resulting in a rapid rise in salary costs. The double squeeze of project quotation and cost side led to a year-on-year decrease of 8.12pct in the company’s gross profit margin.
Big data business maintained rapid growth and occupied a leading position in the market: the company’s big data business revenue in 21 years was 536 million yuan, a year-on-year increase of + 36.75%, and the order amount increased by more than 26% year-on-year. The coverage of key customers made further breakthroughs, and won the bid for Bank Of China Limited(601988) , Bank Of Communications Co.Ltd(601328) , Postal Savings Bank Of China Co.Ltd(601658) and other large bank projects. The number of key customers increased by 92% year-on-year, of which 10 customers reached the scale of 10 million. 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 and 92% coverage of joint-stock banks. In 2022, the company plans to improve the input-output ratio of human resources as a whole through a series of measures such as optimizing personnel structure and improving product maturity, so as to improve the gross profit margin of big data business.
Overseas market expansion has achieved remarkable results, and the business model is expected to be upgraded: the company has achieved overseas business revenue of 162 million yuan in 21 years, a year-on-year increase of + 65%, and the sales contract amount has increased by more than 95% year-on-year. The company has made breakthroughs in the top five major banks in major Southeast Asian countries such as Thailand, Malaysia and Indonesia. The average bid winning rate of ICORE core system in Southeast Asian market is more than 25%, which fully verifies the competitiveness of the company’s products. At the same time, the company takes the concept of SaaS as a new business model for digital banking solutions. It aims to launch relevant products in 2022 and bring them to the market in 2023 as a new growth point for overseas business expansion. We believe that the IT capability of Bank of Southeast Asia customers is weak, and the company has relatively strong bargaining power for them. It is expected to develop a better business model, and the realization of SaaS will further improve the profitability.
Profit forecast and investment suggestion: the company is a leading enterprise in bank it and is expected to benefit from the high growth in bank it demand created by financial information. With the in-depth promotion of Xinchuang, the company’s high investment in the early stage is expected to usher in the harvest period, and the gross profit margin and net profit margin are gradually warmer. It is estimated that the operating revenue from 2022 to 2024 will be RMB 1.936/24.04/2.964 billion respectively, the net profit attributable to the parent company will be RMB 166 / 2.28/289 million respectively, and the closing price of PE on April 15 will be RMB 11.2, 48.73x/35.35x/27.94x respectively, maintaining the “buy” rating.
Risk factors: the promotion of Xinchuang is less than expected, the repeated epidemic has slowed down the progress of project delivery, the overseas business expansion is less than expected, and the market competition is intensified.
