Shanghai Suochen Information Technology (SH:688507) Guotou Securities·2024-05-06 01:13Investment Rating - The report maintains a "Buy - A" investment rating for the company, with a target price of 148.04 CNY for the next six months, which corresponds to a dynamic price-to-sales ratio of 20 times for 2024 [4][11]. Core Insights - The company has experienced significant revenue growth, achieving 320.4 million CNY in 2023, a year-on-year increase of 19.52%. The growth is attributed to strong demand in the defense technology sector and an increase in the share of high-margin engineering simulation software [22][24]. - The company is positioned as a leader in the domestic CAE (Computer-Aided Engineering) industry, with a comprehensive product range that competes with international leaders like Ansys. The report highlights the strategic importance of CAE software in the context of domestic industrial upgrades and the ongoing push for localization [4][13]. - The company is actively expanding into the civilian market and has established a robotics division to enhance its product offerings. This includes the integration of AI technologies into its simulation software, which is expected to drive future growth [3][10][31]. Financial Projections - Revenue projections for the company are as follows: 453 million CNY in 2024, 599 million CNY in 2025, and 780 million CNY in 2026. The expected growth rates are 41.3%, 32.2%, and 30.3% respectively [4][5]. - The report anticipates a net profit of 56.3 million CNY in 2024, with a projected increase to 182.2 million CNY by 2026. The net profit margin is expected to improve from 12.4% in 2024 to 23.4% in 2026 [5][6]. Market Dynamics - The domestic CAE industry is facing dual opportunities: the strong demand for localization and the need for industrial structure upgrades. The report emphasizes that the company is well-positioned to benefit from these trends due to its leading market position and product capabilities [13][24]. - The report notes that the company has successfully optimized its revenue structure, with a significant increase in the proportion of high-margin products contributing to overall profitability [22][24].