\u3000\u30 China Baoan Group Co.Ltd(000009) 97 Newland Digital Technology Co.Ltd(000997) )
The non net profit deducted in 2021 and 2022q1 increased by 17% and 55% respectively year-on-year Newland Digital Technology Co.Ltd(000997) released the 2021 annual report and the first quarterly report of 2022 on the evening of April 26. The company achieved a revenue of 7.698 billion yuan in 2021, a year-on-year increase of 9.0%; The net profit attributable to the parent company reached 704 million yuan, a year-on-year increase of 55.0%; The net profit after deducting non-profit was 499 million yuan, a year-on-year increase of 17.1%. The company’s performance in the first quarter of 2022 went further, with a revenue of 1.605 billion yuan, a year-on-year increase of 4.3%; The net profit after deducting non-profit was 181 million yuan, a year-on-year increase of 55.1%.
In 2021, the performance was brilliant and the operation quality was significantly improved Newland Digital Technology Co.Ltd(000997) 2021 revenue, net profit attributable to parent company and non deduction profit increased by 9.0%, 55.0% and 17.1% respectively year-on-year, with good performance growth. The company’s net profit attributable to the parent company grew faster, mainly due to the fair value profit and loss of about 240 million yuan brought by holding Shenzhen Minde Electronics Technology Ltd(300656) shares. In addition, it is noteworthy that the company’s operating net cash flow in 2021 was 988 million yuan, the best level in history, and the prompt results of operating quality are obvious.
The intelligent terminal goes to sea and the payment is flexible. The revenue side is mainly contributed by the growth of hardware equipment. In 21 years, the revenue of electronic payment equipment was 2.93 billion yuan, a year-on-year increase of 60%; The software service revenue represented by digitization was 1.29 billion yuan, maintaining a steady growth of 10%; The operating income of merchants was 3.43 billion yuan, down 13.8% year-on-year, which is related to the active decision of the company to actively control the flow scale of receipts and improve the quality of merchants. At the business level, it is noteworthy that the company’s overseas revenue was 1.42 billion yuan, a year-on-year increase of 112%, and the company’s overseas shipment of payment equipment exceeded 3.1 million units, a year-on-year increase of 176%. On the other hand, with the steady operation of payment business in 2021, the preferential policies for 22-year payment business are expected to be adjusted, and the increase of “rate” is expected to bring objective profit elasticity.
With the rapid growth in the first quarter of 2022, the imagination space of digital economy is broad. According to the analysis, the company’s 22q1 deduction of non-profit achieved a high growth of 55.1%, which is due to the gross profit margin of 27.1%, an increase of 1.1pct compared with last year. The adjustment of payment business rate and the sales of high gross profit intelligent terminals are expected to continue to improve the profitability of the company. Looking ahead, in addition to the traditional business ushering in a clear inflection point, the company has a leading layout in digital RMB, digital ID card, digital government and rural construction. Relevant businesses are expected to fully benefit from the promotion of the government’s digital construction policies launched in 2022.
Investment suggestion: we expect the company’s operating revenue in 22-24 years to be 8.805 billion yuan, 10.124 billion yuan and 11.417 billion yuan respectively, with a year-on-year growth rate of 14.9%, 15.0% and 12.8% respectively; The net profit attributable to the parent company was 662 million yuan, 862 million yuan and 1.040 billion yuan respectively, with a year-on-year growth rate of – 6.0%, 30.1% and 20.7% respectively. Considering the rapid growth of Newland Digital Technology Co.Ltd(000997) cornerstone business and the potential business space under the catalysis of digital economy, the company’s valuation still has room for improvement. Maintain a “recommended” rating.
Risk warning: repeated outbreaks delay the recovery of the acquiring industry; The gross profit margin fell due to the intensification of competition in intelligent terminals; The promotion of digital RMB was less than expected.
