On October 29, Qi Anxin (688561. SH) released the 2021 third-quarter report. Data show that in the first three quarters of 2021, Qi Anxin’s total operating income reached 2.674 billion yuan, an increase of 43.02% year-on-year. The “Strong R&D” strategy supports sustainable and high growth. In the third quarter, the compound growth rate of revenue in the past two years reached 63.45%, and the gross profit margin increased by 7.41 percentage points. In the first three quarters, the three major expense ratios fell by 13.92 percentage points year-on-year, and the per capita income of all employees continued to increase by 16.42%.
Industry demand soars, new track products account for more than 70% of revenue
This year, many ministries and commissions have intensively introduced a number of new cyber security regulations. Driven by policies, the ceiling for the development of the cyber security industry has been opened, and a new business cycle of the cyber security industry is accelerating.
According to Unshared News: The “Three-Year Action Plan for the High-Quality Development of the Cybersecurity Industry (2021-2023)” issued by the Ministry of Industry and Information Technology, by 2023, the scale of China’s cybersecurity industry will exceed 250 billion yuan. The investment ratio is not less than 10%. Experts predict that with the promotion and support of national policies, the cyber security industry will maintain a growth rate of more than 25% in the next 10 years.
Guosheng Securities Research reported that driven by compliance policies, large-scale application of ICT technology, and security incidents, demand in the cybersecurity industry is expected to accelerate. In the medium and long term, the proportion of domestic IT spending in cybersecurity is expected to increase. According to IDC data, China’s current cybersecurity investment accounts for 1.84% of IT investment. Compared with the global average of 3.74%, the penetration rate still has room for improvement. China’s cybersecurity market will reach 17.9 billion U.S. dollars in 2024, with a CAGR of 18.7% in 2020-2024
The expansion of market demand continues to bring benefits to the network security company. Qi’anxin’s third-quarter report shows that Qi’anxin’s total operating income reached 2.674 billion yuan in the first three quarters of 2021, an increase of 43.02% year-on-year. Among them, the third-quarter revenue reached 1.219 billion yuan, a year-on-year increase of 41.26%, and a growth rate of 167% over the same period in 2019. Thanks to the improvement of the company’s new track product competitiveness and actual combat and defense capabilities, five major customer groups have been formed, including operators, energy, medical and health, finance, and government public security, prosecutorial and legal departments. The top large and medium-sized enterprises and government customers have achieved rapid sales revenue. increase. At present, the proportion of Qi’anxin’s corporate customers continues to increase, with an average growth rate of more than 60%, and enterprise-level customers contribute more than 56% of the company’s main business revenue.
With the in-depth integration and development of digitization, networking, and intelligence, the trend of digital transformation in politics, economy, and society is obvious. The accelerated pace of digitization has stimulated the urgent need for the entire industry to invest in solutions and cultivate related capabilities to protect its own network security. Qi Anxin continues to deepen its layout around several key dimensions such as terminal security, border security, data security, actual situational awareness, and security services. At present, the average growth rate of new track safety products and services revenue exceeds 60%, and new track products and Service income contribute more than 70% of the company’s operating income, becoming the company’s core growth engine.
Gross profit margin increased by 7.41 percentage points, high-quality development achieved results
In 2020, Qi Xiangdong, chairman of Qi Anxin, announced to all the companies that the company has completed the phased task of “scale up” and will achieve “high-quality development” in the next six years. It can be seen from the operating data that the company’s “high-quality development” strategy has achieved results.
The third-quarter report shows that Qi Anxin’s gross profit margin increased by 61.73% in the third quarter, an increase of 7.41 percentage points year-on-year. The main reason for the increase in gross profit margin is the optimization of the company’s product structure, and the quality of the company’s revenue growth is continuously improving. On the one hand, the company’s hardware and other (ie, security integration business) revenues accounted for the proportion of main business revenue gradually narrowing; on the other hand, the company further strengthened expense control and improved operating efficiency. The three major expense ratios of R&D, sales, and management in the first three quarters decreased by 13.92 percentage points year-on-year. Among them, the R&D expense ratio dropped by 3.92%, the sales expense ratio dropped by 6.51%, and the management expense ratio dropped by 3.49%. The per capita income of all employees continued to increase by 16.42%.
On the basis of the original “Kunpeng”, “Noah”, “Raier” and “Zion”, Qi’anxin has upgraded the four new research and development projects of “Chuan Tuo”, “Dayu”, “Xuanji” and “Qianxing” platform. The eight R&D platforms work together to greatly improve R&D efficiency, shorten product innovation cycles, reduce product costs, and quickly develop network security products and solutions that meet the customized needs of customers. Statistics show that over 70% of Qi’anxin’s products have adopted platform-based, framework-based, and component-based production methods.
Essence Securities said that the company’s revenue continued to grow rapidly, and its operating quality improved. The actual loss after excluding share-based payment fees has significantly narrowed year-on-year. New track products and services have become the main growth engine. The proportion of corporate customers has continued to increase, and the average growth rate has exceeded 60%.
R&D investment increased by 42.52% year-on-year
In the “14th Five-Year Plan” and the outline of the 2035 vision and goals just released by the country, the concept of safety runs through. As a leading company in the network security industry, Qi Anxin chose a development model with high R&D investment. The financial report shows that Qi Anxin’s R&D investment in the first three quarters was 1.241 billion yuan, an increase of 42.52% year on year.
Qi Anxin focuses on cloud security, big data security and privacy protection, car networking security, industrial Internet security, zero-trust identity security, actual combat situational awareness, threat intelligence, security operations, code security, and continuous investment in multiple R&D platforms to consolidate “Strong R&D” strategy. According to reports from CCID, Frost & Sullivan, IDC, etc., Qi’anxin has achieved the industry’s first market share in emerging fields such as terminal security, big data intelligent security detection and control, security management platform, and cloud security.
“Net Security One Brother” Qi Anxin performed brilliantly in the third quarter, successfully completing the “2021 100th Anniversary of the Founding of the Party” network security work, and was listed in the “Top 100 Chinese Advanced Computing Companies” for two consecutive years, and also released Yuntian Eye and the “secure DNS” public service QDNS and other new products, and reached strategic cooperation with the Jiang Laboratory, the Ministry of Industry and Information Technology, etc.
As of September 30, 2021, the company has 619 effective invention patents in the field of network security, 8