ZWSOFT(SH:688083) SINOLINK SECURITIES·2024-08-17 08:03Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [3][11]. Core Insights - The company reported a revenue of 310 million RMB for the first half of 2024, representing a year-over-year increase of 11.8%. The second quarter alone saw a revenue of 190 million RMB, up 17.5% year-over-year. The net profit attributable to the parent company for the first half of 2024 was 5.976 million RMB, marking a turnaround from losses, with a net profit of 31.587 million RMB in the second quarter, up 92.8% year-over-year [2]. - The gross margin for the first half of 2024 was 97.71%, an increase of 0.24 percentage points year-over-year, while the net profit margin was 1.94%, up 2.41 percentage points year-over-year [2]. - The company has a strong position in the CAD market, maintaining the highest market share in China, with its software products sold in over 90 countries and regions, and over 1.4 million legitimate users [2]. Summary by Sections Performance Overview - For the first half of 2024, the company achieved a revenue of 310 million RMB, with a year-over-year growth of 11.8%. The second quarter revenue was 190 million RMB, reflecting a 17.5% increase year-over-year. The net profit for the first half was 5.976 million RMB, compared to a loss in the previous year, with a significant profit of 31.587 million RMB in the second quarter, up 92.8% year-over-year [2]. - The gross margin for the first half of 2024 was 97.71%, an increase of 0.24 percentage points year-over-year, while the net profit margin was 1.94%, up 2.41 percentage points year-over-year [2]. Product Analysis - The company's 3D products showed strong performance, with the overseas market expanding steadily. The standard general software segment generated 289 million RMB in revenue, accounting for 93.63% of total revenue, with 2D products contributing 192 million RMB and 3D products contributing 89 million RMB, reflecting year-over-year growth of 8.33% and 30.15% respectively [2]. - The revenue from customized software development and technical services has slightly increased, while the proportion of purchased software and hardware has decreased [2]. Regional Performance - Domestic revenue reached 220 million RMB, a year-over-year increase of 6.1%, with the commercial market contributing 187 million RMB (up 19.5%) and the education market declining to 33 million RMB (down 35.5%). International revenue was 88 million RMB, up 28.68% year-over-year [2]. Cost Structure - Research and development expenses increased slightly due to talent acquisition, with a research expense ratio of 64.86%, up 6.37 percentage points year-over-year. The sales expense ratio was 56.82%, down 3.30 percentage points, and the management expense ratio was 19.14%, up 6.12 percentage points [2]. Valuation - The current price-to-sales (P/S) ratio is approximately 8 times, which is considered at the valuation bottom since the company went public. The report recommends buying at the current price [2][3].