Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 13.85 [2][5]. Core Insights - The company's revenue for 2023 was CNY 7.891 billion, a year-on-year increase of 2%, with traditional business revenue declining by 3.4% [2]. - New business segments, referred to as "three new businesses," generated CNY 2.9 billion, reflecting a year-on-year growth of 12.7% [2]. - The gross profit margin decreased to 37.7%, while the overall gross profit increased by 1.2% to CNY 2.975 billion [2]. - The adjusted net profit for 2023 was CNY 8.51 billion, maintaining a net profit margin of 10.8% [2][5]. - The company plans to increase investments in 5G and AI sectors to mitigate challenges in its traditional BSS business [2][3]. Summary by Sections Business Overview - The company operates in the application software industry and was established in July 2003, with a registered capital of HKD 10,000 [2]. - The company employs 13,235 staff and is chaired by Tian Suning [2]. Financial Performance - The traditional BSS business revenue was CNY 4.991 billion, down 3.4% year-on-year, while the BSS segment alone generated CNY 4.881 billion, a decrease of 0.9% [2]. - The three new business segments include OSS, digital operations, and vertical industry digitization, with OSS revenue growing by 24.9% to CNY 0.832 billion [2][3]. - The company’s net profit for 2023 was CNY 0.512 billion, a decline of 37.9% due to non-operating factors, including asset impairments [2]. Future Outlook - The company anticipates that OSS revenue will grow by at least 20% in the coming year, driven by advancements in AI and network technologies [3]. - The vertical industry digitization business is expected to continue its rapid growth, particularly in energy and transportation sectors [4]. - The company is focusing on a strategic transformation to leverage AI and data technologies, aiming to expand into non-telecom sectors [4]. Valuation Metrics - The projected revenue for 2024 and 2025 is CNY 8.32 billion and CNY 9.009 billion, respectively, with corresponding adjusted net profits of CNY 0.959 billion and CNY 1.042 billion [5]. - The company’s current price-to-earnings ratio is estimated at 6.87 for 2024, significantly lower than the industry average [5][6].
三新業務引領增長，四個轉變推動盈利