\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 74 Yusys Technologies Co.Ltd(300674) )
Investment logic
Three factors drive the bank's it boom. IDC expects the overall industry CAGR to be 18.8% from 2020 to 2025. The driving force behind the high prosperity of the industry is the policy to promote the independence of banking technology, the transformation of banking IT architecture to distributed, and the demand of banking business for data governance, credit, regulatory submission and other systems.
The company has a balanced customer structure, which is conducive to stabilizing the customer investment cycle and experience transfer. The company's revenue from large commercial banks, joint-stock and policy banks, urban and rural commercial banks is generally balanced; In 2017, the above customers contributed 22%, 31% and 33% to the company's revenue respectively. This enables the company not to be affected by the fluctuation of IT investment of a single category of customers, and can smoothly migrate the successful experience of one category of customers to other customers.
The products are surprisingly conservative, giving consideration to steady growth and rapid growth. As one of the bank IT service providers with the most complete product line in China, the company can stabilize the construction cycle of different products. While the software business, as the company's growth ballast, is growing steadily at a rate of about 20%; The company focuses on the innovative operation product line with a growth rate of 40% ~ 50%, so as to take into account both stable growth and rapid growth.
Optimize the revenue structure, improve the quality and efficiency of management, and the gross profit margin and net profit margin are expected to be further improved. The rapid growth of innovative operation business with gross profit of more than 70% is conducive to continuously improve the overall gross profit margin of the company. At the same time, the company expects that the share based payment fee will be reduced by about 60 million in 2022, so we judge that the net interest rate of the company is expected to be further improved.
R & D investment continued to increase. In 2021, the company invested 430 million yuan in R & D, a year-on-year increase of 38.7%, and the R & D expense rate was 11.7%, an increase of 1.2pct over the previous year. In addition, the company raised 1.12 billion yuan through private placement in September 2021, which is intended to be used for the construction of "online financial platform for small, medium-sized and micro financial institutions", "intelligent analysis and application platform based on artificial intelligence technology", "comprehensive risk and value management" and other projects.
Investment advice
We estimate that the operating revenue of the company from 2022 to 2024 will be 4.47/5.52/6.74 billion yuan respectively, the net profit will be 5.3/6.9/8.6 billion yuan respectively, the corresponding EPS will be 0.74/0.97/1.20 yuan, and the current share price will be 20x / 15x / 13X respectively corresponding to the PE from 2022 to 2024. The company will be given a reasonable valuation of 30 times PE in 2022, the corresponding target price will be 22.15 yuan / share, the first coverage will be given a "buy" rating.
Risk tips
The repeated epidemic makes the company's operation less than expected; Innovative operation and other high gross profit business expansion are less than expected; Industry competition intensifies; Risk of lifting the ban; Risk of reduction of shareholders and executives.
