Pan Wei Network (603039) Annual Report Commentary Report: Performance Slightly Exceeds Expected 19-year High Growth Expectations Continue

Pan Wei Network (603039) Annual Report Commentary Report: Performance Slightly Exceeds Expected 19-year High Growth Expectations Continue

Event: On the evening of March 28, the company released its 2018 annual report: in 2018, the company achieved revenue of 10.

4.0 billion, an annual increase of 42.

51%, achieving net profit attributable to mothers1.

140,000 yuan, an increase of 31 in ten years.


Opinion: The performance was slightly higher than expected, and Q4 performance rebounded significantly.

In the fourth quarter of 2018, the company achieved revenue3.

$ 8.1 billion, an increase of 48 per year.

98%, distorting the quarter-to-quarter growth trend of revenue growth in the first three quarters, slightly exceeding expectations.

In terms of business, software products + technical services business achieved 北京夜网 revenue9.

820,000 yuan, an increase of 41 in ten years.

9%, solid performance.

The third-party product business performed well and achieved zero income.

22 ppm, an increase of 79 in ten years.


In terms of different regions, the company’s revenue growth in North China, South China, and Western Regions were 50%, 47%, and 43%, indicating that the company’s regional business has developed smoothly and its competitive advantage has gradually strengthened.

The report decreased, the company may sell financial assets (Shanghai Xiaojia Network) impairment loss of 14.74 million yuan, if added back to the project, the company realized a profit1.

29 ppm, an increase of 48 in ten years.


The expense ratio is stable, cash flow continues to improve, and advance funds received maintain a high growth.

In total, the company’s management expense ratio (plus R & D expenses) and sales expense ratio were 20 respectively.

91%, 71.

59%, basically the same as last year.

Cash flow continued to improve and gradually realized a net cash inflow2.

00 ppm, an increase of 27 in ten years.


Funds received in advance 5.

30 ppm, an increase of 23 in ten years.

2%, still maintaining high growth.

The contract lock of 50 million cash value-added funds confirms the broad prospects of the digital signature business, and the cooperative development of both parties’ business is worth looking forward to.

For the total number of reports, the company decided to invest 50 million yuan in cash in Shanghai Yanyan Network (Contract Lock) and hold 25% of its shares after the capital increase (interim report in 2018: 16%).

The digital signature market is expected to continue to double in the next 3-5 years, and its traffic business model will be excellent.

The capital increase will help the company further improve its layout in the areas of electronic contract signing and seal management, further expand the business area and product application scope of the target company, and achieve complementary advantages and coordinated development.

E-colgoy 9 new product promotion + government customer expansion is expected to promote the company’s continued high growth.

In September 2018, the company launched a new generation of “intelligent, platform-based, full-process electronic” product E-cology 9 in cooperation with Tencent, Shanghai CA, Contract Lock and other cooperative units.

Electronics 9 integrates three new functions of intelligent voice assistant, CA certification and signature signing. It is a major upgrade of the company’s products, and its competitive advantage is very prominent, which helps drive the company’s new and old customers to focus on upgrading.

In addition, the company expands and expands in the government market. At present, the country has products serving more than 2,000 party and government agencies.

The company has launched a domestic product structure. Under the background of autonomy, the company’s advantages in the government field have been increasing.E9 new product promotion + government customer expansion is expected to drive the company’s continued high growth in 2019.

Investment suggestion: The company has outstanding comprehensive advantages and is expected to continue to expand.

The company is expected to achieve revenue from 2019-2021.

52, 17.

37, 21.

45 yuan to achieve net profit attributable to mother 1.

55, 2.

03, 2.

5.7 billion US dollars, optimistic about the company’s development prospects, maintain a “buy” rating.

Risk warning: New product expansion is less than expected, customer expansion is less than expected, and industry competition is intensifying.