\u3000\u30 Zhongyan Technology Co.Ltd(003001) 68 Wonders Information Co.Ltd(300168) )
Event: on the evening of April 28, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the annual revenue reached 3.513 billion yuan, a year-on-year increase of 16.78%; The net profit attributable to the parent company was 69 million yuan, an increase of 105.36% year-on-year, turning losses into profits; Deduct the non parent net profit of RMB 8.51 million, with a year-on-year increase of 100.62%, turning losses into profits; The basic earnings per share was 0.06 yuan / share, with a year-on-year increase of 105.45%. In the first quarter of 2022, the revenue was 817 million yuan, a year-on-year decrease of 1.89%; The net profit attributable to the parent company was 13 million yuan, with a year-on-year increase of 214.11%; Deduct 170000 yuan of net profit not attributable to the parent company, with a year-on-year increase of 102.57%; The basic earnings per share was 0.01 yuan / share, a year-on-year increase of 213.89%. In the early stage, we predicted that the net profit attributable to the parent company was 53 million yuan, and the performance was in line with expectations.
Comments:
Optimize corporate governance
The company actively expanded the market, and its revenue increased by 16.78% year-on-year in 2021; Internally, we optimized the internal management system, strengthened refined management, and significantly improved a number of key indicators. In 2021, the gross profit margin of the company was 33.49%, with a year-on-year increase of 17.64pct; The rates of sales, management and financial expenses decreased by 0.79pct, 2.59pct and 0.23pct respectively year-on-year; The turnover days of business accounts receivable decreased from 120 days to 68 days.
Accelerate business transformation and expand innovative business
The company accelerated the transformation of products, cloud and SaaS, and promoted the adjustment of the company’s product revenue structure. The annual revenue of the traditional sector increased by 14.1% year-on-year, and the gross profit margin was about 31.9%, up 16pct year-on-year. The company actively developed the two strategic innovation sectors of health management and smart city. The revenue increased by 41.8% year-on-year, accounting for 11.7%, and the gross profit margin was about 45.3%, up 27pct year-on-year. In August 2021, the company issued a fixed increase plan, which plans to raise no more than 3 billion yuan to invest in smart health care, smart city and other fields.
Profit forecast and valuation
Considering the impact of the epidemic and the improvement of corporate governance, we predict that the revenue in 202223 will be 4.040/4.848 billion yuan (the original value is 5.893 billion yuan and 7.689 billion yuan), and the net profit attributable to the parent company will be 202577 million yuan (the original value is 198 million yuan and 420 million yuan) respectively. At the same time, the 24-year profit forecast revenue will be 6.060 billion yuan, the net profit will be 1.005 billion yuan, EPS will be 0.17/0.49/0.85 yuan / share, and the corresponding PE will be 45x / 16x / 9x respectively. Maintain the “overweight” rating.
Risk tips
1. Systemic risk; 2. The epidemic situation affects the project progress; 3. Intensified market competition
