Transwarp(SH:688031)2024-02-22 16:00Investment Rating - The report assigns an "Outperform" rating to the company with a target price of RMB 76.38 [4][19]. Core Insights - The company has shown steady revenue growth, with software products and services accounting for over 80% of total revenue. In 2022, revenue reached RMB 373 million, a year-on-year increase of 12.62%, while the net profit attributable to shareholders was -RMB 271 million, down 10.90% year-on-year. For the first three quarters of 2023, revenue was RMB 223 million, up 30.05% year-on-year, with a net profit of -RMB 269 million, a decline of 19.15% year-on-year [4][28]. - The company is adapting to industry trends by focusing on multimodal, intelligent, agile, and accessible product development [28]. Financial Overview - Revenue projections for 2023-2025 are RMB 534 million, RMB 769 million, and RMB 1,117 million, respectively, with corresponding net profits of -RMB 271 million, -RMB 195 million, and RMB 4 million [12][19]. - The gross profit margins for software products and services are expected to improve, reaching 68.75%, 69.75%, and 70.75% for 2023-2025, while overall gross profit margins are projected at 57.96%, 59.67%, and 61.53% [30][19]. Product Development - The company has released several key products in big data and cloud platforms, including TDH9.3, which supports various data management needs, and Transwarp Hippo, a distributed vector database [5][29]. - In the area of distributed relational databases, the company has enhanced its ArgoDB6.0 for real-time analytics and KunDB3.2 for transaction processing [6][29]. Market Position and Strategy - The company is positioned to benefit from the growing database market in China, which is expected to reach RMB 630 billion by 2025, with a CAGR of 25.33% from 2022 [9]. - The company has established a comprehensive partner ecosystem and is actively engaging with various industries, including finance, education, and healthcare, to expand its market reach [8][17].