Newtouch(SH:688590) Orient Securities·2024-07-02 13:02Investment Rating - The report assigns a "Buy" rating for the company, marking it as the first rating given [2]. Core Views - The company is positioned as a leader in insurance IT services and is rapidly advancing in the AI sector, with significant growth in revenue and net profit forecasted for the coming years [6][14]. - The company has shown a stable increase in revenue, achieving 1.683 billion yuan in 2023, a year-on-year growth of 27.92%, and a net profit of 68.62 million yuan, reflecting a substantial increase of 232.11% [14][25]. - The company is actively expanding its IT solutions across various industries, particularly in insurance and finance, leveraging advancements in AI and digital transformation [12][20][71]. Summary by Sections Financial Performance - The company reported a revenue of 1.683 billion yuan in 2023, with a year-on-year growth of 27.92% and a net profit of 68.62 million yuan, up 232.11% from the previous year [14][25]. - Forecasts for 2024 project revenues of 2.141 billion yuan, with a growth rate of 27.2%, and a net profit of 138 million yuan, indicating a growth of 101.8% [25]. Business Segments - The primary revenue source is the IT solutions business, which consistently accounts for over 80% of total revenue. In 2023, this segment saw a significant increase of 26.16% year-on-year [37]. - The company provides tailored IT solutions for major clients in the insurance sector, including China Pacific Insurance and China Life Insurance, showcasing its strong market presence [71]. Industry Trends - The insurance industry is undergoing a digital transformation driven by regulatory policies, which is expected to increase the demand for IT solutions [20][23]. - The implementation of the IFRS17 accounting standard is enhancing transparency in the insurance sector, further driving the need for advanced IT solutions [23]. Research and Development - The company has increased its R&D investment, with expenses reaching 135 million yuan in 2023, a growth of 9.18% year-on-year. The R&D team consists of 834 personnel, focusing on technological advancements and product innovation [40]. - The company has filed 37 patent applications in 2023, indicating a strong commitment to innovation and technology development [40]. Future Outlook - The company aims to continue investing in AI models and financial IT solutions, with projected sales and management expense ratios indicating a focus on sustainable growth [85]. - The report highlights the potential for rapid growth in the insurance sector due to favorable regulatory changes and increasing digitalization [41].