\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 360 360 Security Technology Inc(601360) )
China’s leading Internet and security service provider maintains a “buy” rating
Considering the increased investment in the company’s government enterprise security business, we lowered the company’s forecast of net profit attributable to the parent company from 2022 to 2023 to 901 and 1164 million yuan (the original forecast was 3.029 and 3.612 billion yuan), increased the forecast of 2024 to 1.481 billion yuan, EPS to 0.13, 0.16 and 0.21 yuan / share, and the current stock price corresponds to 63.4, 49.1 and 38.6 times of PE from 2022 to 2024. Considering that the company is a leading Internet and security service provider in China, it maintains the “buy” rating.
The performance in 2021 is in line with expectations, and the security business is growing rapidly
In 2021, the company achieved an operating revenue of 10.886 billion yuan, a year-on-year decrease of 6.28%, including Internet advertising and service revenue of 6.306 billion yuan, a year-on-year decrease of 16.06%; The revenue of intelligent hardware business was 2.063 billion yuan, a year-on-year decrease of 3.68%; The revenue from Internet value-added services was 1.104 billion yuan, a year-on-year decrease of 2.67%; The revenue from safety and other businesses was 1.381 billion yuan, a year-on-year increase of 70.91%. The net profit attributable to the parent company was 902 million yuan, a year-on-year decrease of 69.02%, and the net cash flow from operating activities was 166 million yuan, a year-on-year decrease of 91.48%, mainly due to the decrease of Internet advertising and service business income and the increase of security business investment.
2022q1 security business orders received smoothly
In 2022q1, the company realized an operating revenue of 2.526 billion yuan, a year-on-year decrease of 1.03%; The net profit attributable to the parent company was 222 million yuan, a year-on-year decrease of 17.98%. Q1 company’s safety business orders have been received smoothly, and the urban safety orders of 547 million yuan have been received, and the completion progress of safety related operating revenue has reached 39.6% in 2021.
The security business has actively expanded the market and achieved remarkable results
By enabling relevant products through “cloud security brain” and “core security brain”, the company has significantly improved the overall customer coverage of security business, completed the full coverage of key customers, and significantly increased the number of regional customers and newly signed amount: the company has signed 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.
Risk tip: the impact of the epidemic on the company’s business and the expansion of government and enterprise safety business are not as expected.
