\u3000\u3 Guocheng Mining Co.Ltd(000688) 083 Zwsoft Co.Ltd(Guangzhou)(688083) )
Key investment points
Performance summary: the company achieved an operating revenue of 620 million yuan in 2021, with a year-on-year increase of 35.7%; The net profit attributable to the parent company was 180 million yuan, a year-on-year increase of 50.9%.
The company’s annual revenue and net profit attributable to the parent company increased significantly in 2021, with excellent gross profit margin. 1) From the revenue side, the company’s revenue increased by 35.7% year-on-year in 2021, mainly due to the company’s active development of major customers in domestic and overseas commercial markets and the continuous promotion of localization and legalization of large enterprises in the Chinese market. 2) From the profit side, the net profit attributable to the parent company in 2021 increased by 50.9% year-on-year, mainly due to the increase in revenue, government subsidies and financial management income compared with the same period last year. The gross profit margin of the company was 98.1%, down 0.9% from the same period last year. 3) From the cost side, the company’s sales, management and R & D expense rates in 2021 were 43.2%, 9.1% and 32.8% respectively, of which the sales expense increased by 47.1% year-on-year, mainly due to the company’s strengthening of the construction of marketing system and the transformation of direct sales team to key customer model.
The demand for industrial software in the domestic commercial market continues to grow. China’s industrial software market has been occupied by foreign manufacturers for a long time. The intensification of Sino US trade friction makes the importance of localization of core technology more prominent, and the pace of domestic R & D and design industrial software entering China’s large enterprises has accelerated. The company actively embraces the localization trend, steadily expands the direct sales team, actively recruits channel dealer partners, accelerates the market sinking of second tier cities, provides services for more small and medium-sized enterprises and institutions, and shares the industrial development dividend with Chinese industrial software partners.
We have helped reform education and continuously improved the coverage of overseas markets. The company’s products are becoming more and more popular in the education industry, and the AI education solutions provided by the company support the implementation of AI education in 27 provinces and cities. The company continues to improve and enrich its product matrix, and has released 10 new products / product versions in 21 years. Among them, the number of trial users of Zhongwang education cloud platform products increased by 516.7% year-on-year. In addition, the company has made significant breakthroughs in the construction of foreign distribution channel network, and the number of new cooperative channels is more than twice that of previous years. It has successfully established local business and support teams in strategic markets such as the United States, Vietnam and Japan.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 3.75 yuan, 5.12 yuan and 6.63 yuan respectively, and the net profit attributable to the parent company will reach a compound growth rate of 31.2% in the next three years. Considering that the company is a leading enterprise in the field of industrial software in China, attaches great importance to the research and development of core technologies, continues to strengthen the construction of brand influence and marketing system, and strengthens the construction of talent team, it is expected that the order volume will usher in a significant growth in 2022. It is estimated that it will be valued at 65 times in 2022, with a corresponding target price of 243.75 yuan. It will be covered for the first time and given a “buy” rating.
Risk tips: R & D projects are not as expected, customer development is not as expected and other risks.
