CS&S(600536) 东吴证券·2024-05-06 23:30Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company experienced a significant decline in revenue and profit in 2023, primarily due to lower contract amounts in the cybersecurity market and increased investments in major projects [2][3] - Despite the overall downturn, the company's proprietary software products and the performance of its subsidiaries, Kirin Software and Dameng Data, showed resilience and growth [3] - The report anticipates a recovery in the company's performance as the cybersecurity industry gradually improves, leading to revised profit forecasts for 2024-2026 [3] Financial Performance Summary - In 2023, the company reported total revenue of 6.723 billion yuan, a decrease of 30.26% year-on-year, and a net loss of 232.75 million yuan compared to a profit of 45.95 million yuan in the previous year [2] - For Q1 2024, revenue was 703 million yuan, down 42% year-on-year, while net profit increased by 44% to 111 million yuan due to reduced expenses and investment gains [2] - Kirin Software achieved revenue of 1.273 billion yuan in 2023, up 10% year-on-year, while Dameng Data reported revenue of 794 million yuan, a 15% increase [3] Earnings Forecast and Valuation - The report adjusts the net profit forecasts for 2024 and 2025 to 1.57 billion yuan and 3.45 billion yuan, respectively, and introduces a new forecast of 6.08 billion yuan for 2026 [3] - The projected earnings per share (EPS) for 2024, 2025, and 2026 are 0.18 yuan, 0.40 yuan, and 0.71 yuan, respectively [2][3] - The price-to-earnings (P/E) ratio is expected to improve from a negative 111.81 in 2023 to 42.78 by 2026 [2][3]