Apex(SH:603383)2024-09-23 08:03Investment Rating - The report assigns an "Outperform" rating to the company with a target price of RMB 36.90 based on a 2024 PE of 30x [4][11]. Core Viewpoints - The company is a leading financial IT service provider, focusing on fintech and providing comprehensive digitalization support through its proprietary "3+1" technology platform. Despite short-term performance pressures due to market conditions, the company is expected to benefit from the financial industry's digital transformation in the medium to long term [4][11]. - In 2024H1, the company reported a revenue of RMB 267 million, a decrease of 4.93% year-on-year, and a net profit attributable to shareholders of RMB 49 million, down 21.11% year-on-year. The decline in performance is attributed to slowed IT investments from financial industry clients [11][12]. - The company is actively reducing costs and increasing efficiency while continuing to invest in R&D, with R&D expenses reaching RMB 80 million, an increase of 7.79% year-on-year [11][12]. Financial Performance Summary - For 2024, the company is projected to achieve total revenue of RMB 784 million, a growth of 5.4% year-on-year, and a net profit of RMB 254 million, an increase of 8.7% year-on-year. The EPS is expected to be RMB 1.23 [4][11]. - The company’s gross profit margin (GPM) is expected to improve gradually, with projections of 70.1% in 2024, 70.2% in 2025, and 70.4% in 2026 [4][11]. - The custom software business, which is the core revenue source, is expected to grow at rates of 5.0% in 2024, followed by 20.0% in 2025 and 2026 [4][11]. Business Development and Innovation - The company is making significant progress in its new core trading system A5, with successful implementations at seven securities firms, including CITIC Securities [2][11]. - The company is also pursuing external collaborations for business innovation, including a strategic partnership with Tencent Cloud to enhance financial innovation through various projects [2][11]. - The company maintains a leading position in the asset management sector and continues to support the digital investment banking platform, which is currently in the acceptance stage at several securities firms [2][11].