\u3000\u3000 Northking Information Technology Co.Ltd(002987) (002987)
Northking Information Technology Co.Ltd(002987) , a front-line manufacturer of bank it information technology services with enterprising business strategy. The company is one of the leading IT services of banks, mainly providing information technology services and business process related services to financial institutions. In recent years, the company’s revenue has risen steadily; In 21 years, the gross profit of information technology services of H1 company accounted for more than 70%, and the major bank customers contributed 80% + revenue.
Driven by digital RMB and Xinchuang, the market is expected to have a high outlook. In terms of policy, the pilot of financial it localization has entered the deep-water area and comprehensive promotion is imminent; Technically, the software and hardware facilities of the financial industry have been independently controllable; Therefore, we believe that financial Xinchuang is expected to accelerate its full roll out. The company is expected to participate in and benefit from the transformation of software from office system to business system. Considering that the demand for the construction of information innovation and the promotion and application of digital currency will continue in the next three years, we believe that the bank’s IT solutions will maintain a compound growth rate of 25% in the period of 21-25 years, corresponding to the market scale of 62.8 billion yuan in 21 years and 155.3 billion yuan in 25 years.
With the support of big banks, the company’s revenue growth is expected to exceed the industry average. The company’s revenue growth rate exceeded the industry average with big banks. In the past 20 years, the IT investment of state-owned big banks and the revenue from state-owned big banks both grew by 35% year-on-year, 15 PCT higher than the industry average growth rate of 20%. At the same time, the company continues to develop small and medium-sized banks and non bank customers, effectively expanding the industry space. Northking Information Technology Co.Ltd(002987) while building systems with high complexity and different business models for large banks, mature solutions are precipitated and promoted in small and medium banks. This successfully opened up the industry space, and the revenue growth of small and medium-sized banks and non bank markets reached more than 40% in H1 in 21 years.
With the upgrading of the company’s business model, we expect the revenue profit scissors to expand in 22 years. The main reasons are as follows: 1) with the further increase of the proportion of information technology service revenue, the company’s profitability is expected to be structurally improved; 2) The balance between supply and demand in the talent market also tends to ease, and the growth rate of labor cost is expected to slow down in 22 years; 3) The company’s cloud testing platform is basically mature, and the growth rate of R & D investment in 22 years is also expected to slow down.
SaaS level products and cloud measurement management platform are put into use to verify the improvement of the company’s product capability. Cloud testing business continues to grow and has been successfully implemented in more than ten customers. The company’s high growth in software development and testing business in recent years has laid a foundation for the subsequent promotion of cloud testing products and the re upgrading of business model.
Profit forecast: we expect the company’s operating revenue from 2021 to 2023 to be RMB 3.130/42.27/5.563 billion respectively, with a year-on-year increase of 37%, 35% and 32%; The gross profit margin is 26.46%, 27.92% and 28.31% respectively, and the net profit is RMB 262 / 403 / 556 million respectively, corresponding to P / e36.5% 89 / 23.99/17.39 times. We believe that the company will maintain rapid growth in the future to digest the current valuation. We give the company a target valuation of 25 times P / E in 2023, corresponding to a market value of 14 billion yuan. It is covered for the first time and given a “buy” rating.
Risk tips: macroeconomic and policy risks, rising human costs, changes in the competitive environment, recent changes in stock prices, and the calculation is subjective.
