\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 48 Shenzhen Sunline Tech Co.Ltd(300348) )
Event: on April 15, the company released its 2021 annual report, realizing 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%. On April 22, the company released the first quarter report of 2022, realizing an operating revenue of 276 million yuan, a year-on-year increase of 62.61%; The net profit attributable to the parent company was -10 million yuan, a year-on-year decrease of 182.59%, in line with market expectations.
The business continues to develop steadily, and the profitability is temporarily under pressure due to the impact of project running in and income standards. 1) In 2021, the company continued to strengthen resource investment in the field of information and innovation, deepen and broaden cooperation with head bank customers, and actively developed to overseas markets, realizing the continuous and stable development of various businesses. This year, the company's operating revenue was 1.572 billion yuan, a year-on-year increase of 1.37%, and the overall gross profit margin was 42.15%, a year-on-year decrease of 8.12 PCT. Among them, the revenue of digital financial business solutions was 687 million yuan, a year-on-year decrease of 26.40%, the gross profit margin was 48.67%, a year-on-year decrease of 5.39 PCT, the revenue of big data application system solutions was 536 million yuan, a year-on-year increase of 36.75%, the gross profit margin was 39.73%, a year-on-year decrease of 7.86 PCT, and the revenue of whole financial value chain business management solutions was 201 million yuan, a year-on-year increase of 9.01%, the gross profit margin was 34.07%, a year-on-year decrease of 7.84 PCT. 2) In 2021, the company realized a net profit attributable to the parent company of 126 million yuan, a year-on-year decrease of 46.73%. The profitability was temporarily under pressure. On the one hand, large factories participated in financial technology competition, the labor cost generally increased, and the company entered the top bank, resulting in the cost of early investment and running in period. On the other hand, the company was still in the transition period of the new income standard of the final acceptance method this year, and the projects across the annual accounting cycle accounted for a relatively high proportion, As a result, some profits and losses cannot be reflected in the current year. In addition, the foreign currency exchange rate fluctuates violently, resulting in large exchange losses. With the adjustment of customer contract price, it is expected that profitability will gradually normalize. 3) In 2021, the net operating cash flow of the company was 33 million yuan, a year-on-year decrease of 76.34%, mainly due to the increase of labor costs and related expenses caused by the growth of the company's business, as well as the rapid growth of the proportion of key customers, resulting in a long period of initial project acceptance and payment collection. 4) The business income of the company increased by 6.22 billion yuan in the first quarter, mainly due to a year-on-year increase of 6.26 billion yuan in the first quarter; The net profit attributable to the parent company was -10 million yuan, a year-on-year decrease of 182.59%, which was mainly due to the increase of costs and expenses caused by personnel investment and the decrease of government subsidies and investment income compared with last year, which was in line with market expectations.
The overall cost rate increased slightly and reasonably, and the R & D investment remained at a high level. 1) In 2021, the company's overall expense rate was 33.10%, up 2.57 PCTs year-on-year, mainly due to the increase of free maintenance cost and personnel cost, which increased from 6.18% in 2020 to 8.35% in 2021. 2) The company has always attached importance to R & D investment. In 2021, the R & D investment reached 148 million yuan, accounting for 9.42% of the operating revenue. In recent three years, the cumulative R & D investment reached 527 million yuan, and the R & D personnel reached 977, accounting for 17.21% of the total personnel, consolidating the company's leading advantage in product technology in the industry.
Strengthen the cooperation between head commercial banks and Xinchuang ecology, and bank it is expected to enter a high business cycle. 1) With the natural replacement cycle of the bank's IT system, the distributed construction driven by the trend of information innovation and the resonance of the triple positive factors of digital currency, the bank's IT solutions have entered a high business cycle. According to IDC's calculation, in 2020, the market scale of IT solutions in Bank Of China Limited(601988) industry will be about 50.24 billion yuan, and by 2025, the market scale is expected to reach 118.56 billion yuan. 2) The company attaches importance to the cooperation with China's leading commercial banks, which helps to precipitate the world's leading product solutions.
By the end of 2021, the company has cooperated with 3 policy banks, 6 large state-owned commercial banks and all national joint-stock banks. At the same time, it has also cooperated with 48 urban commercial banks with assets of more than 500 billion and 42 rural commercial banks. With assets of more than 500 billion and customer coverage of more than 87%, the company has established a good reputation. With Xinchuang entering the deep-water area, the gross profit is expected to improve after the running in period. 3) In addition, the company also keeps close contact with ecological manufacturers in the field of information and innovation, such as Tencent, Huawei, jd.com and Inspur, and successively cooperates in databases, servers and cloud services to provide overall solutions. With the improvement of the ecosystem, customers have more flexible choices in the field of information and innovation, which also improves the actual competitiveness of the company. 4) In the field of digital currency, as the leader of the core banking system, the company is also expected to enjoy the wave of DCEP related system construction.
The overseas market has achieved phased results or become a new growth point in the future. In 2021, the company made breakthroughs in the top five major banks in major Southeast Asian countries such as Thailand, Malaysia and Indonesia. The company has successively won the bid of CIMB Philippine bank, SCB Bank of Thailand, SCC Bank of Malaysia, China Citic Bank Corporation Limited(601998) (Hong Kong), Shanghai Pudong Development Bank (Hong Kong), BNC Bank of Indonesia and other projects. The average winning rate of ICORE core system in Southeast Asia market is more than 25%, which fully verifies the strong product competitiveness of the company. In 2021, overseas business contract orders increased by more than 95% year-on-year, and revenue increased by 65% year-on-year. It has achieved phased results in overseas development strategy and is expected to become a new growth point of the company in the future.
Maintain the "buy" rating. It is estimated that the operating revenue from 2022 to 2024 will be 2.059 billion yuan, 2.548 billion yuan and 2.976 billion yuan respectively, and the net profit attributable to the parent company will be 215 million yuan, 299 million yuan and 313 million yuan respectively. Maintain the "buy" rating.
Risk warning: it expenditure of banking industry is lower than expected; Financial regulation affects innovation; Risk of loss of technicians.
