\u3000\u30 China Baoan Group Co.Ltd(000009) 97 Newland Digital Technology Co.Ltd(000997) )
Event: the company issued the 2021 annual report and the 2022 first quarter report. In 2021, the total operating revenue was 7.698 billion yuan, a year-on-year increase of 8.99%, the net profit attributable to the parent company was 704 million yuan, a year-on-year increase of 54.95%, and the net profit not attributable to the parent company was 499 million yuan, a year-on-year increase of 17.13%. In 2022q1, the total operating revenue was 1.791 billion yuan, a year-on-year increase of 5.29%, the net profit attributable to the parent was 84 million yuan, a year-on-year decrease of 19.22%, and the net profit not attributable to the parent was 181 million yuan, a year-on-year increase of 54.95%. In line with market expectations.
The business of electronic payment and information reading equipment has driven the steady growth of revenue, and the performance has warmed up in 21 years. 1) In 2021, the company achieved a total operating revenue of 7.698 billion yuan, an increase of 8.99% and an overall gross profit margin of 30.59%, with a year-on-year decrease of 0.60pct, including 3.428 billion yuan of revenue from commodity operation and value-added services, a decrease of 13.78% and a gross profit margin of 26.37%, with a year-on-year decrease of 1.52pct; The revenue of electronic payment products and information reading products was 2.963 billion yuan, with a year-on-year increase of 59.69%, and the gross profit margin was 30.54%, an increase of 1.00 PCT year-on-year; The industry's application and software development and service revenue was 1.286 billion yuan, an increase of 10.42% and a gross profit margin of 41.83%, a year-on-year decrease of 3.20 PCT. 2) The net profit attributable to the parent company was 704 million yuan, an increase of 54.95% at the same time. The performance recovered, which was due to the growth of the total revenue and net profit of the operation and payment business, and the overseas business had entered the stage of rapid growth, providing good support. At the same time, the amount of non recurring profit and loss caused by the fluctuation of stock price increased significantly to 205 million yuan, including the profit and loss related to trading financial assets and liabilities of 249 million yuan. The net profit deducted from non parent company was 499 million yuan, an increase of 17.13% at the same time. 3) The net operating cash flow was 988 million yuan, an increase of 100.98%, which was due to the development of electronic payment and reading business, and the increase in cash received from the sale of goods and the provision of labor services.
R & D investment remained high and expenses were well controlled. 1) The company attaches importance to R & D investment. In 2021, the R & D expenditure reached 674 million yuan, an increase of 9.36% and the R & D expenditure rate reached 8.76%, which was basically the same as that in the same period. The R & D team continued to grow. In 2021, the R & D personnel reached 3512, accounting for 53.09% of the total employees. R & D investment is mainly invested in information reading, intelligent payment, digital currency, etc., so as to further enhance the core technology competitiveness. 2) In 2021, the company's overall expense rate was 18.94%, with a year-on-year increase of 0.65pct. In addition to R & D expenses, the sales expense rate was 3.64%, with a year-on-year decrease of 0.06pct, the management expense rate was 6.66%, with a year-on-year increase of 0.55pct, the financial expense rate was - 0.12%, with a year-on-year increase of 0.13pct, and the expense was well controlled.
After excluding non operating disturbances, the performance of 22q1 improved steadily. In Q1 2022, the company achieved results in overseas market development, anti risk capacity-building, profitability elasticity recovery and other aspects, maintained steady growth, and made breakthroughs in the construction of digital RMB and trusted digital identity. 22q1 achieved a total operating income of 1.791 billion yuan, an increase of 5.29% and a net profit attributable to the parent company of 84 million yuan, a decrease of 19.22%, which was due to the non recurring profit and loss caused by the fluctuation of stock price. After excluding the non operating disturbance, the net profit deducted from the non attributable to the parent company reached 181 million yuan, an increase of 54.95% and the performance improved steadily.
The competition pattern of third-party payment has improved, and the SaaS ecosystem of data operation has become the starting point. 1) According to the statistics of the central bank, the consumption of bank cards increased by 135.55 trillion yuan in 2021. In the era of "disconnection and direct connection", Internet giants are suppressed, the industry competition pattern is improved, and compliant enterprises will enjoy the "leftover bonus". 2) After the "96 fee reform", the profit margin of the acquiring industry has narrowed, the company has millions of merchant data resources, and SaaS value-added services have greatly improved customer stickiness and traffic value. The company provides data drainage and intelligent risk control for financial institutions and provides operating loan services to small, medium-sized and micro businesses. By the end of 2021, the cumulative service users of financial technology business were nearly 400000, the balance of assets under management was 4.33 billion yuan, and the non-performing loan rate was 1.56%. The performance of risk control has maintained the excellent level in the industry. It is expected to accelerate the volume and enter the 100 billion market of financial loan assistance services in the future.
Create an independent and controllable industrial ecology, and open new growth with digital RMB and trusted digital identity. 1) At the same time, as a class a candidate donor of the open atom open source foundation, the company has deeply participated in the open source Hongmeng industrial project, provided machine vision and intelligent terminal solutions, created an independent and controllable mobile intelligent terminal industry ecology, and provided the cornerstone for the development of digital RMB and trusted digital identity. 2) In terms of digital RMB, the company has deeply participated in the construction of the whole scene of digital RMB acceptance of Beijing Winter Olympic Games. It is the only outsourcing service provider and core intelligent POS provider for the construction of head office level digital RMB payment acceptance system. It has advantages in industry experience and customer stickiness. 3) In terms of trusted digital identity, the two sessions of the National People's Congress in 2022 clearly proposed to realize the electronization of ID card. The company once built a Ctid platform with the Ministry of public security to provide online function services of ID card. It is not only the core supplier of Ctid QR code chip and reading engine, but also the core exporter of QR code technology, which is expected to dominate the blue ocean market of billions of scale.
Maintain the "buy" rating. According to key assumptions and recent announcements, it is estimated that the operating revenue from 2022 to 2024 will be RMB 9.359 billion, RMB 10.873 billion and RMB 12.269 billion respectively, and the net profit attributable to the parent company will be RMB 869 million, RMB 1.049 billion and RMB 1.220 billion respectively. Maintain the "buy" rating.
Risk warning: business promotion fails to meet expectations; Macroeconomic risks; Key assumptions are inconsistent with the actual situation
