\u3000\u30 Zhongyan Technology Co.Ltd(003001) 30 Xgd Inc(300130) )
High performance growth. In 2021, the company achieved an operating revenue of 3.612 billion yuan, a year-on-year increase of 37.21%; The net profit attributable to the parent company was 201 million yuan, a year-on-year increase of 131.98%. In the first quarter of 2022, the company realized an operating revenue of 1.015 billion yuan, a year-on-year increase of 44.05%; The net profit attributable to the parent company was 91 million yuan, with a year-on-year increase of 72.09%; The net profit attributable to the parent company after deduction was 71 million yuan, with a year-on-year increase of 87.94%.
The digital RMB business has made steady progress. At present, the company has completed the preliminary technical joint debugging system test of some institutions, and cooperated with banking institutions to further assist the merchant terminal transformation, dual offline pilot transformation, scene landing and other promotion services. It has been applied in scenes such as the Winter Olympic Games, and accelerated the ecological construction of digital RMB acceptance environment. At the same time, the company actively carries out the product development of digital RMB “Hard Wallet”, and has completed the product design and technology development.
Equity incentive binds the interests of the company’s employees. On April 25, 2022, the company issued a 22 year equity incentive plan, which plans to grant 25 million stock options to incentive objects, accounting for 5.11% of the company’s total share capital of 489 million shares on the announcement date of the draft incentive plan. The first grant price of the stock option plan is 15 yuan / share. Based on the net profit of 2021, the growth rate of net profit in 2022 / 2023 relative to 2021 shall not be less than 20% / 40%.
Actively expand overseas business. In 2021, the company achieved overseas revenue of 544 million yuan, an increase of 89.55% year-on-year. From 2017 to 2021, the company’s overseas revenue increased from 83 million yuan to 544 million yuan, with a compound annual growth rate of 60%, which means that the company’s overseas expansion is fruitful, mainly benefiting from the accelerated popularization of contactless payment in the world under the background of the continuous spread of covid-19 epidemic, driving the rapid growth of demand for payment hardware equipment in the overseas market.
Investment suggestion: the company takes payment as the starting point and gradually opens application scenarios. The company’s high growth rate in the first quarter laid the foundation for the high growth rate of the whole year. It is estimated that the company’s EPS from 2022 to 2024 will be 0.78/1.08/1.43 yuan respectively, maintaining the buy rating.
Risk warning: impact of payment industry policies; The landing of digital RMB business is less than expected; Industry competition intensifies.
