\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 360 360 Security Technology Inc(601360) )
The overall performance during the transition period is under pressure. In 2021, the company realized revenue of 10.886 billion yuan (- 6.28%), net profit attributable to parent company of 902 million yuan (- 69.02%), net profit not attributable to parent company of 608 million yuan (- 76.11%) deducted. In the first quarter of 2022, the company realized a revenue of 2.526 billion yuan (- 1.03%), a net profit attributable to the parent company of 222 million yuan (- 17.98%), and a net profit not attributable to the parent company of 190 million yuan (- 17.16%). The overall income and profit of the company have declined, mainly because the company is currently in the period of strategic transformation and continues to increase the investment in government and enterprise safety business; At the same time, the main source of profit is the decline of Internet business and asset impairment loss.
The security business of government and enterprises increased rapidly, and the investment of various expenses increased significantly. In 2021, the company's traditional business declined, with Internet advertising and service revenue of 6.306 billion yuan (- 16.06%), intelligent hardware revenue of 2.063 billion yuan (- 3.68%), and Internet value-added service revenue of 1.104 billion yuan (- 2.67%). The company's safety and other business income reached 1.381 billion yuan (+ 70.91%), and the gross profit margin was 67.26%, a year-on-year decrease of 8.45 PCT. In the first quarter of 2022, the company has completed the confirmation of urban safety orders of 547 million yuan and still maintained high growth. Government enterprise security business is the direction of the company's full transformation. While maintaining rapid growth, the corresponding investment is also increasing. The rates of sales, management and R & D expenses reached 20.52%, 7.08% and 28.74% respectively, with an increase of 6.23 PCT, 1.42 PCT and 4.02 PCT respectively.
The security brain continues to make breakthroughs, and the Internet business is expected to stabilize and recover. Through the combination of "cloud" and "local", the customer coverage of the company's safety brain products has been greatly improved. In 2021, the company completed new contracts with nearly 2000 customers, covering more than 90% of central ministries and commissions, 80% of central enterprises and 95% of large financial institutions, and carried out network security cooperation with millions of small and medium-sized enterprises. The company's PC security products still maintain an absolute leading market share. The accumulation of 17 years has enabled the company to develop rich security big data and Threat Intelligence. While strongly supporting the development of security brain, the Internet business has also become the company's stable cash flow support. After the decline in previous years, PC advertising business has entered a stable state; The game version number has also been reopened recently, and the company's Internet business is expected to stabilize and recover.
Risk tip: the epidemic situation repeatedly affects the normal operation rhythm of the company, and the industry competition intensifies.
Investment suggestion: maintain the "overweight" rating. It is estimated that the operating revenue from 2022 to 2024 will be RMB 12.238136.58/14.946 billion, with growth rates of 12% / 12% / 9% respectively, and the net profit attributable to the parent company will be RMB 1.068/13.21/1.590 billion, corresponding to 58 / 47 / 39 times of the current PE, maintaining the "overweight" rating.
