Sangfor Technologies (SZ:300454) KAIYUAN SECURITIES·2024-04-09 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [2][4]. Core Views - The report expresses a strong outlook on the company's long-term development, despite a downward adjustment in net profit forecasts for 2024-2025 due to a weaker-than-expected macroeconomic recovery and cautious customer spending [4]. - The company reported a revenue of 7.662 billion yuan for 2023, a year-on-year increase of 3.36%, and a net profit of 198 million yuan, up 1.89% year-on-year [5]. - The report highlights the company's leading position in the cloud and cybersecurity sectors, supporting the maintained "Buy" rating [4]. Financial Performance Summary - The company achieved a gross margin of 65.13%, an increase of 1.31% year-on-year, attributed to improved supply chain management and strategic partnerships [5]. - The net cash flow from operating activities was 947 million yuan, a year-on-year increase of 26.97%, indicating strong cash flow performance [5]. - The forecasted earnings per share (EPS) for 2024-2026 are 0.73, 1.23, and 1.61 yuan, respectively, with corresponding price-to-earnings (P/E) ratios of 81.2, 48.0, and 36.8 [4][6]. Revenue Breakdown - The revenue from the cybersecurity business was approximately 3.892 billion yuan, a slight decrease of 0.14% year-on-year [5]. - The cloud computing and IT infrastructure business generated about 3.090 billion yuan, reflecting an 8.07% year-on-year growth [5]. - The overseas market showed robust growth with a revenue increase of 47.98% [5]. Cost Control and Efficiency - The company has effectively controlled costs, with the sales expense ratio at 35.26%, an increase of 2.74 percentage points year-on-year, while management and R&D expense ratios decreased [5]. - The report indicates a focus on cost reduction and efficiency improvement measures [5]. Future Projections - The adjusted net profit forecasts for 2024 and 2025 are 306 million yuan and 518 million yuan, respectively, with a new forecast for 2026 set at 675 million yuan [4][6]. - Revenue projections for 2024-2026 are 8.272 billion yuan, 9.256 billion yuan, and 10.566 billion yuan, indicating a growth trajectory [6].