On January 24, CICA security officially launched the subscription, with the issue price of 30.51 yuan / share and the online subscription code of 787225. According to the offering price and the number of new shares issued, CICA security is expected to raise 1.22 billion yuan. After deducting the issuance expenses, the net amount of funds raised is expected to be 1.12 billion yuan, 85.06 million yuan less than the original plan.
CICA’s competitors in the industry include Dbappsecurity Co.Ltd(688023) , Beijing Vrv Software Corporation Limited(300352) , Sangfor Technologies Inc(300454) , Qi An Xin Technology Group Inc(688561) , etc. Compared with friends, AsiaInfo security has been deeply engaged in the field of telecom operators. For a long time, China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) has ranked among its top three customers, and the revenue from operators accounts for about 60% .
In addition, the company’s terminal security, cloud security, apt governance and other products were originally derived from the M & A of trend technology in 2015. In this regard, Lu Guangming, director and general manager of AsiaInfo security, told the reporter of science and Innovation Board daily during the online roadshow that at present, the company does not rely heavily on the intellectual property rights of trend technology, including product source code, engine service and patent license.
List of comparable companies in the industry
in 2021, the net profit deducted from non attributable parent decreased by more than 20%
According to the prospectus, CICA security expects the operating revenue to be 1.66 billion yuan to 1.7 billion yuan in 2021, with a year-on-year increase of about 30.24% to 33.38%; The net profit attributable to the parent company is expected to be RMB 165 million to RMB 175 million, with a year-on-year change of about – 3.16% to 2.71%; It is estimated that the net profit deducted from non parent company is RMB 100 million to RMB 110 million, with a year-on-year decrease of about 21.44% to 28.58%.
As for the reasons for the decline of non net profit deduction in 2021, he Zheng, chairman of CICA security, replied to the reporter of science and Innovation Board daily at the online roadshow that is mainly due to the year-on-year increase in sales expenses, R & D expenses and share based payment expenses .
\u3000\u3000 “In 2020, due to the uncertainty of the epidemic situation, the company strengthened cost control and cash flow management, and the overall cost investment was relatively low; in 2021, around the medium and long-term strategy and industry growth opportunities, the company took the initiative to increase the construction, expansion and R & D investment of marketing network and service system, resulting in the increase of sales expenses and R & D expenses. In addition, the company’s costs and management expenses also increased Share based payment. “
At present, the main business of AsiaInfo security is divided into four product service systems, including:
The digital trust and identity security product system focuses on products related to identity identification, access control and data security, and provides users with functions related to digital identity, such as account management, access authentication, authority control, access process audit and data security control,;
The endpoint security product system focuses on terminal security, cloud security, advanced threat governance and border security products. By deploying the system products in different locations, it can provide security protection for users’ IT systems, resources and terminal equipment;
The cloud edge security product system is represented by big data analysis and security management products and 5g cloud edge management products. For example, by building a situation awareness platform and linking other security equipment capabilities, customers can realize all-weather and all-round network threat identification, early warning and processing capabilities; Through the construction of domain name resolution and network access system, provide operators with network management capabilities such as domain name resolution, security protection, data analysis and security supervision.
The network security service system includes Threat Intelligence, advanced threat research, red blue confrontation, attack and defense penetration, Internet asset vulnerability analysis, risk assessment and security training services.
Among them, digital trust and identity security products, endpoint security products and cloud edge security products account for more than 90% of the main business revenue.
Composition and proportion of main business
In terms of gross margin level, endpoint security products have the highest degree of standardization. In the first half of 2021, the gross margin is 77.21% , which is also the highest gross margin among all products. The gross profit margins of cloud virtualization basic software and network security services are low, 13.99% and 12.79% respectively. The gross margins of digital trust and identity security products and cloud edge security products were 49.55% and 39.90% respectively.
IDC’s tracking report on China’s IT security software market in the first half of 2021 shows that AsiaInfo security ranks first in the field of identity and digital trust software in China with a market share of 10.3% . In China’s terminal security software market, it ranked second with a 12.7% share, while Qi An Xin Technology Group Inc(688561) 17.2% ranked first, and Sangfor Technologies Inc(300454) ranked third with 6.3%. In security analysis and intelligence, response and orchestration software and other market segments, CICA security was not listed.
there is no significant dependence on trend technology
In September 2015, AsiaInfo technology acquired all businesses of trend technology in China, including more than 100 core technologies and intellectual property rights, and established AsiaInfo security, an independent security technology company. all core R & D and technical personnel of the original trend technology China security and technical service business are integrated into CICA security . At the same time, AsiaInfo security has also absorbed the original communication security technology of AsiaInfo technology. However, this has also raised doubts in the industry about its core R & D capabilities.
From the prospectus, the cooperation mode between CICA security and trend technology includes exclusive product distribution cooperation, exclusive technical service, source code cooperation and OEM cooperation.
On January 5, 2022, AsiaInfo security pointed out in its reply to the CSRC on the cooperation mode of trend technology that the company does not have the situation that the product source code and underlying technology are controlled and controlled by AsiaInfo technology and trend technology . In 2015, the product source code cooperated with trend has been replaced by localization through years of independent R & D iterations, and the rest of network security products are native localization and independently controllable.
Lu Guangming, director and general manager of AsiaInfo security, told SciDev board daily that at present, the company does not rely heavily on the intellectual property rights of trend technology, including product source code, engine service and patent license.
” the source code of the products cooperated with trend technology constitutes a major change, and there is no need to return trend technology or destroy . The trend cooperation products sold by the company are self controllable, even if trend technology no longer provides engine services to the company, the trend cooperation products can still use the company’s self-developed engine to ensure the safety protection performance of the products , which will not affect the normal development of the company’s business; At the same time, if the cooperation is stopped, the company can choose to cooperate with other engine manufacturers outside China.
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China Mobile is the largest customer
AsiaInfo technology started with serving telecom operators and is the BSS / OSS core software service provider of China’s three major telecom operators. The main customer groups of CICA security are also the three operators. In 2019, 2020 and the first half of 2021, China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) ranked among its top three direct sales customers.
According to the prospectus, from 2018 to 2020 and the first half of 2021, the revenue of CICA security from telecom operators was 570 million yuan, 740 million yuan, 850 million yuan and 2.8 yuan respectively, accounting for 65.44%, 68.29%, 66.93% and 58.40% respectively.
This leads to a high customer concentration of CICA security . During the reporting period, the sales revenue of the company’s top five customers accounted for 75.12%, 82.77%, 80.89% and 78.58% of the main business revenue in the same period respectively.
As its largest customer, China Mobile’s sales revenue was 209 million yuan, 403 million yuan, 464 million yuan and 180 million yuan respectively, accounting for 23.88%, 37.40%, 36.38% and 37.05% of its main business revenue in the same period.
