\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 74 Yusys Technologies Co.Ltd(300674) )
Event overview
The company released the first quarterly report of 2022. During the reporting period, the company achieved a revenue of 407 million yuan, a slight decrease of 2.5% year-on-year; The net profit attributable to the parent company was 1.6 million yuan, turning losses into profits, with a year-on-year increase of 106%; The non net profit deducted was 695400 yuan, a year-on-year increase of 102%.
Analysis and judgment:
Q1 outstanding performance, return to the parent net profit, turn losses into profits.
In 2022, the company will strive to overcome the multi-point recurrence of the national epidemic and try its best to ensure the normal delivery of relevant businesses. During the reporting period, the company’s software development business maintained rapid growth, and its revenue increased by 24% year-on-year:
1. Outstanding performance of credit product line: 1) start business expansion in non bank fields such as guarantee, pawn, leasing and auto finance, and win the bid for new projects in the first quarter; 2) Successfully won the digital small and micro credit platform project of a well-known bank in the south. (data source: from the company’s official wechat)
2. The data product line increased by more than 40% year-on-year: 1) in the field of data asset management, it won the first order of policy bank; 2) The integration of data asset management consulting and product implementation has been completed in more than 10 financial customers; 3) In the field of data application, it has successively won industry benchmark cases in the fields of intelligent risk control, risk measurement and digital business analysis. (data source: from the company’s official wechat)
3. In terms of supervision, east5.0 was launched 0 submission products, deposit insurance 2.0 submission products, new related parties and related transaction management systems and other new products. Among them, east5 0 submission products and deposit insurance 2.0 submission products have been implemented in many banks. (data source: from the company’s official wechat)
4. The layout of new channel products has achieved remarkable results, with abundant reserve orders. It is expected to achieve sustained and good growth this year. (data source: from the company’s official wechat)
In addition, the revenue of innovative operation business with high gross profit margin increased by 130% year-on-year, mainly due to the steady progress of the company in business expansion such as digital credit, traditional technology operation, marketing operation and Yuxin financial cloud:
1. Digital retail credit has newly expanded two bank customers, and newly launched a full range of automotive finance solutions and digital business analysis platform products (data source: from the company’s official wechat);
2. In terms of marketing operation, we have successfully signed a joint operation project of two bank deposits, and implemented a foreign bank activity marketing project and a city commercial bank loan secondary marketing project. (data source: from the company’s official wechat)
22q1’s overall revenue decreased slightly, mainly due to the decrease of 65.57% in the revenue of system integration sales and service business with low gross profit margin, but this also led to the increase of the company’s overall gross profit margin by 6.02pct to 37.61%. During the reporting period, the net profit attributable to the parent company turned losses into profits, an increase of 27.93 million yuan over 21q1, a year-on-year increase of 106%. Share based payment expenses also decreased by 25.91 million yuan compared with the same period of the previous year. Excluding share based payment and deduction of non net profit, the company’s net profit was 15.99 million yuan, a year-on-year increase of 21.26%. We believe that the company is expected to continue to benefit from the high prosperity of the industry under the background of the steady progress of “upward cycle of track prosperity + accelerated promotion of domestic substitution + digital currency”.
The sales expense rate and financial expense rate decreased, and the R & D investment continued to increase.
During the reporting period, the company’s sales expense ratio decreased by 0.35pct to 4.98% year-on-year, and the financial expense ratio decreased by 0.75pct to -0.85%. In addition, the company continued to increase R & D investment, with R & D expenses increasing by 14.29% year-on-year to 78.22 million yuan, and R & D expense rate increasing by 2.83 PCT to 19.24%. The company goes deep into the basic process research and development and product refining of credit, data, channels and other businesses, speeds up the iterative development of products, gradually improves the modularization and intellectualization of products, reduces the cost of product delivery and implementation, and builds firm technical barriers for enterprises.
Share repurchases safeguard the interests of investors and demonstrate confidence in long-term development.
On April 28, the company announced that on April 27, 2022, the board of directors of the company received the letter on proposing the company’s share repurchase and interim proposal submitted by Zhuhai Yuqin Hongtai Venture Capital Group Co., Ltd., the controlling shareholder of the company, and proposed that the company repurchase the company’s issued A-shares from the secondary market with its own funds and self raised funds of no less than 150 million yuan and no more than 300 million yuan. At the same time, the company issued a repurchase plan, which plans to repurchase the company’s A-share shares in the form of centralized bidding transaction with its own funds and self raised funds of no less than 150 million yuan and no more than 300 million yuan. Based on the repurchase price ceiling of 27 yuan / share, the number of repurchased shares is expected to be 5556000 ~ 11110000 shares, accounting for 0.78% ~ 1.56% of the company’s current total share capital. The shares repurchased this time will be used to implement the employee stock ownership plan or equity incentive.
We believe that, on the one hand, the company’s move reflects the company’s maintenance of the interests of the majority of investors and is conducive to enhancing investor confidence; On the one hand, it also shows the company’s confidence in future development prospects and high recognition of the company’s internal value.
Investment advice
Maintaining the profit forecast, we expect the company to achieve operating revenue of 4.776 billion yuan, 6.159 billion yuan and 7.994 billion yuan respectively from 2022 to 2024, with a year-on-year increase of 28.2%, 29% and 29.8%; The net profit attributable to the parent company was 550 million yuan, 653 million yuan and 827 million yuan, with a year-on-year increase of 39%, 18.7% and 26.5%; From 2022 to 2024, EPS is 0.83 yuan, 0.99 yuan and 1.25 yuan respectively. Taking the closing price of 13.45 yuan on April 28, 2022 as a reference, the corresponding PE is 16x / 14x / 11x respectively. The company is a leading manufacturer (top2) in the field of banking it. With strong card position advantages (customer barriers) and product technology advantages based on self-research / cooperation, the company is expected to fully enjoy the dividend of industry expansion. In addition, the company’s innovative business and overseas business are gradually expanding, which is expected to become a new revenue growth pole. We continue to be optimistic about the development prospects of the company and maintain the “buy” rating.
Risk tips
The risk of intensified industry competition, the risk of higher than expected fluctuation of IT investment budget of downstream banks, the risk of less than expected promotion of innovative business, the risk of less than expected business expansion in Southeast Asia market, and the risk of less than expected project development caused by repeated epidemics.
