Integrity Technology (688244) 海通国际·2024-06-04 12:31Investment Rating - The investment rating for the company is "Outperform" [6][20][21] Core Insights - The company achieved robust revenue growth of 19.72% year-on-year in 2023, reaching RMB 396 million, despite a significant decline in net profit attributable to shareholders, which fell by 38.78% to RMB 31 million [13][31] - The decline in profit was attributed to increased R&D expenses, which rose by 33.10%, and a 36.25% increase in sales expenses aimed at expanding key industry clients [13][31] - The company is expanding its presence in Hong Kong by establishing a digital wind tunnel assessment center, investing HKD 100 million, which will focus on smart cities and digital infrastructure [14][31] - The company's "digital wind tunnel" product system has been successfully deployed across various sectors, generating RMB 101 million in revenue in 2023 [37] - The cyber range products have shown strong performance, with revenue of RMB 232 million, reflecting a year-on-year growth of 23.12% [37] Financial Performance Summary - In 2023, the company reported total revenue of RMB 396 million, with a projected revenue increase to RMB 506 million in 2024, RMB 635 million in 2025, and RMB 803 million in 2026 [7][11][38] - The net profit is expected to recover to RMB 60 million in 2024, RMB 100 million in 2025, and RMB 129 million in 2026, with corresponding EPS of RMB 0.87, RMB 1.45, and RMB 1.86 [11][38] - The gross margin is projected to remain stable around 55% over the next few years [11][38] Market Position and Strategy - The company is positioned as a leader in the cyber range market, holding significant market share and industry influence, and has received the first national certification for its cyber range products in China [37] - The strategic partnerships with entities like China Unicom and the Ministry of Industry and Information Technology are expected to enhance the company's growth prospects [38] - The company aims to replicate its mainland security assessment experience in Hong Kong, promoting its products internationally [14][31]