\u3000\u3 China Vanke Co.Ltd(000002) 152 Grg Banking Equipment Co.Ltd(002152) )
Key elements of the report:
On the evening of April 27, 2022, the company released the first quarter report of 2022. In the first quarter, the company realized an operating revenue of 1.403 billion yuan, a year-on-year increase of 10.62%, and a net profit attributable to the parent company of 225 million yuan, a year-on-year increase of 11.13%; The non net profit attributable to the parent company was 211 million yuan, with a year-on-year increase of 19.62%.
Key investment points:
Steady growth in revenue and further improvement in profitability: in the first quarter, the company continued to implement diversified scenarios of digital economy, driving steady growth in revenue. The growth rate of deducting non net profit was significantly ahead of the growth rate of revenue, mainly due to the company’s gross profit margin increased by 2.39pct to 40.24% year-on-year. We believe that the increase of gross profit margin is mainly due to the rapid growth of the company’s financial information and innovation machines and software development business with high gross profit. The rates of sales / management / Finance / R & D expenses were 8.34% / 5.92% / – 1.68% / 7.98% respectively, with a year-on-year change of 0.25/0.27/ -0.15/0.32pct. During this period, the expense rate increased steadily and slightly, among which the R & D expense rate has increased year-on-year for four consecutive quarters, which is expected to enhance the company’s technology and product competitiveness.
For the pilot expansion of digital RMB, the company grasps the operation of the digital RMB scenario in Guangzhou: the company closely follows the pace of the pilot promotion of digital RMB, and the products and solutions related to digital RMB have been adopted in many pilot areas such as Beijing, Shanghai, Hainan and Changsha. At present, a new round of digital RMB pilot has been opened in Guangzhou. As a local enterprise in Guangzhou, with the accumulation of scenes in the fields of transportation, security, education and convenience, the company will help the continuous expansion of digital RMB application scenes in Guangzhou.
The company is expected to benefit from the policy of overweight Digital Government: on April 19, the central comprehensive Deepening Reform Commission deliberated and adopted the guiding opinions on strengthening the construction of digital government, emphasizing the wide application of digital technology in government management services and promoting the digital and intelligent operation of the government. The company deeply participated in the construction of Digital Government: it won the bid for the “Sui Zhi Guan” operation service project of Guangzhou Digital Government operation center with 130 million yuan in 21 years; Assist in building Guangzhou government Xinchuang cloud; Help “Guangdong intelligent assistance” to achieve full coverage of administrative villages in Guangdong Province. With strong policy support, the company is expected to further expand its business space by virtue of its in-depth cooperation with government departments and profound experience in digital government business.
Profit forecast and investment suggestions: it is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 74.10/80.90/8.769 billion respectively, and the net profit will be RMB 954/11.01/1.253 billion respectively. The corresponding closing price PE on April 27, 2022 will be 21.73x/18.83x/16.55x respectively, maintaining the “overweight” rating.
Risk factors: macroeconomic fluctuation risk; The landing progress of digital currency is less than expected; Intensified market competition; Technology research and development is not as expected; Exchange rate fluctuation risk
