SERVYOU(SH:603171) Southwest Securities·2024-09-03 09:30Investment Rating - The report maintains a "Buy" rating for the company with a target price of 29.26 CNY over the next six months [1][7]. Core Insights - The company reported a steady revenue growth of 7.5% year-on-year, achieving 810 million CNY in revenue for the first half of 2024, with a net profit attributable to shareholders of 88.24 million CNY, reflecting a 0.9% increase [2]. - The B-end business is expected to accelerate its penetration in the market, driven by the ongoing promotion of the Golden Tax Phase IV electronic invoicing system [2][5]. - The company has shown strong cash flow improvement, with a net inflow of 76.09 million CNY in operating cash flow for Q2 2024, reversing previous losses [2]. Financial Performance Summary - For the first half of 2024, the company achieved a gross margin of 61.0%, with a net profit margin of 10.8% [2]. - The company’s G-end business generated 260 million CNY in revenue, a 2.1% increase year-on-year, while the B-end business saw a revenue increase of 10.4% to 550 million CNY [2]. - The projected earnings per share (EPS) for 2024, 2025, and 2026 are 0.38 CNY, 0.62 CNY, and 0.96 CNY, respectively, with corresponding dynamic price-to-earnings (PE) ratios of 64, 39, and 25 [3][6]. Business Segment Analysis - The G-end business is expected to maintain a steady growth rate of 5% from 2024 to 2026, benefiting from the company's leading market share in the Golden Tax project [5]. - The B-end business is projected to grow significantly, with an expected increase in the number of paying users and an improvement in average revenue per user (ARPU) due to enhanced compliance and tax optimization products [5][6]. - The company is focusing on enhancing its digital tax services, with a notable increase in active enterprise users on its digital tax service platform [2][5]. Valuation and Market Position - The company’s current PE ratio of 64 is significantly lower than the industry average of 258, indicating potential undervaluation [7][8]. - The report suggests that the company’s leading market position in the G-end sector and the anticipated growth in the B-end customer base will contribute to improved profitability [7].