\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 536 China National Software And Service Company Limited(600536) )
Event: on April 28, 2022, China National Software And Service Company Limited(600536) released the first quarterly report of 2022. In the first quarter of 2022, the company achieved a revenue of 1.524 billion yuan, a year-on-year increase of 49.64%; The net profit attributable to the parent company was -103 million yuan, deducting the net profit not attributable to the parent company was -104 million yuan, and the loss narrowed. The performance is in line with market expectations.
Key investment points
The credit innovation industry is booming, and the epidemic has led to pressure on cash flow: on the premise of substantial growth in revenue in the first quarter of 2021, the company’s revenue in the first quarter of 2022 increased significantly again, with a year-on-year increase of 49.64%, mainly due to the high prosperity of the downstream credit innovation industry. In the first quarter of 2022, the company’s operating cash flow was -1.847 billion yuan, a year-on-year decrease of 501 million yuan (the first quarter of 2021 was -1.346 billion yuan), which was mainly due to the slowdown in payment collection affected by the epidemic and the increase in labor costs caused by a large year-on-year increase in personnel.
Clear performance objectives for equity incentive: on February 24, 2022, the company announced the 2021 restricted stock incentive plan (Revised Draft), which plans to grant a total of 14.83 million restricted shares to incentive objects. The lowest performance assessment target is based on the net profit in 2020, the compound growth rate of net profit in 2022 is not less than 17%, the highest is based on the net profit in 2020, and the compound growth rate of net profit in 2024 is not less than 19% China National Software And Service Company Limited(600536) as the core integrator and basic software manufacturer of the information and innovation industry, equity incentive will further enhance the cohesion and help the company accelerate its development under the high prospect of the information and innovation industry.
With the opening of the industry information innovation space, Kirin software has made great progress: the market scale of industry information innovation is expected to double in 2022. As the leader of domestic operating system, Kirin software has achieved breakthroughs in many industries. In the telecommunications industry, in March 2022, Kirin software won the bid for 70% of the desktop operating system centralized purchase project of China Mobile from 2022 to 2023. In the financial industry, Guosen Securities Co.Ltd(002736) otc trading counter system, anti money laundering system and HR human management system have been localized in the whole stack. The system adopts Kirin operating system, which has been running stably for several months as of March 2022.
Profit forecast and investment rating: 2022 is a big year for the industry. We believe that as the leader of domestic operating system, the performance of Kirin software will usher in accelerated development. Based on this, we maintain the parent net profit forecast of RMB 214 / 424 / 706 million from 2022 to 2024, and maintain the “buy” rating.
Risk tip: the progress of national basic it ecological construction is slow, and the industry competition is intensified.
