\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 74 Yusys Technologies Co.Ltd(300674) )
Event overview
Yusys Technologies Co.Ltd(300674) released the first quarterly report of 2022 on April 28. The company achieved an operating revenue of 407 million yuan, a year-on-year decrease of 2.5%; The net profit attributable to the parent company was 1.5974 million yuan, a year-on-year increase of 106%; Deduct 695400 yuan of non parent net profit, with a year-on-year increase of 102%.
The main software business grew steadily, with abundant orders on hand to support the development of the whole year
The main reason for the year-on-year decrease of 2.50% in the company’s revenue is that the revenue of integrated sales and service business decreased by 66%. Due to the low level of gross profit of this business, the decline in the proportion of revenue is conducive to optimizing the company’s revenue structure, and the overall gross profit margin of the company increased by 6.02% compared with the previous year. In addition, the improvement of profit quality also helped the company turn its net profit from loss to profit, realizing 1.5974 million yuan, an increase of 27.93 million yuan over the previous year. The growth of main software business remained strong and steady, with a revenue of 315 million yuan, a year-on-year increase of 24%. In terms of credit products, the V5 version of the new generation of distributed credit is expected to usher in rapid growth this year, and the non bank sector will win the bid for new projects. The number of orders placed by the company exceeded 40% over the same period last year, and the number of orders placed by the company exceeded that of the same period last year. In terms of regulatory products, in order to meet the requirements of the new regulatory regulations, the company launched east5 at the first time 0 submission products and deposit insurance 2.0 submission products, and have been implemented in many banks. In addition, the company’s software business has abundant orders, with a year-on-year increase of 25% in the first quarter, laying a solid foundation for the business development of the whole year.
Innovative business revenue doubled and business expansion moved forward steadily
In the first quarter, thanks to the steady progress in business expansion such as digital credit, traditional technology operation, marketing operation and Yuxin financial cloud, the company’s innovative operation business achieved a revenue of 41.55 million yuan, a year-on-year increase of 130%. In terms of digital retail credit, two new bank customers have been added, and the newly launched auto finance full range solutions and digital business analysis platform products are widely recognized by potential customers and are expected to sign a contract at the end of the year. In terms of marketing operation, the company 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. In terms of Yuxin financial cloud, Yuxin has participated in the construction of Xinchuang cloud construction projects of several joint-stock banks and accumulated the consulting, construction, operation and maintenance capabilities of the whole stack of Xinchuang private cloud. We believe that with the company’s continuous investment in talent attraction and business operation ability of innovative business, the rapid growth of its revenue is expected to provide strong support for the company’s second growth curve.
Overseas business accelerated growth, and domestic digital transformation maintained a high boom in the industry
In the first quarter, the company accelerated the market expansion in Singapore, Indonesia, Cambodia and Malaysia, and mobile banking products successfully landed in the Southeast Asian market. Network transformation products, channel products, data products and Devops products are expected to be implemented successively this year. In addition, the company invested in goto, an Indonesian Internet giant, to strengthen ecological cooperation and inject new momentum into the development of overseas business. In China, the financial digital transformation is an important part of the digital economy, and the bank it development continues to increase. In this environment, the financial IT industry leaders with a more comprehensive business system and strong technical strength will take the lead in benefiting from the market expansion. According to IDC’s prediction, the IT solution market scale of Bank Of China Limited(601988) industry will grow to 118.56 billion yuan in 2025, with a five-year CAGR of 14.64%, maintaining a high boom for a long time.
Investment advice
With the gradual increase of financial digitization policy, the demand for it development of banks continues to be strong, and they are gradually moving towards an independent, controllable, efficient and economical domestic distributed architecture; On the other hand, the company’s innovative business results show that the innovative mode of co construction and co operation has brought considerable profit performance; In addition, with Baidu, Tencent, Huawei and other companies to build a financial cloud and data platform business, it also gradually supports business income generation. I expect Yusys Technologies Co.Ltd(300674) 20222024 to achieve revenue of RMB 4.579/5.503/6.507 billion respectively, with a year-on-year increase of 22.9% / 20.2% / 18.2%; The net profit attributable to the parent company was 486 / 614 / 761 million yuan, with a year-on-year increase of 22.7% / 26.4% / 24.0%, maintaining the “buy” rating.
Risk tips
1) the risk that the implementation of digital policies in the financial industry is less than expected; 2) The risk that the downstream demand expansion of banks is less than expected; 3) Affected by the epidemic, there is a risk that the business volume of innovative operation will decline.
