In the first half of the year, revenue maintained high growth and losses narrowed. The company released 23H1 report, the first half of the company to achieve revenue of 2.483 billion yuan (26.15), the return of net profit -0.88 billion yuan, loss narrowed 3.26 percent year-on-year, non-net profit -0.979 billion yuan, loss narrowed 7.09 percent year-on-year. In Q2 alone, the company realized revenue of 1.557 billion yuan (-19.01%), the net profit of the parent -0.347 billion yuan, the loss narrowed by 19.19% YoY, and the non-net profit -0.346 billion yuan, the loss narrowed by 22.96% YoY.

gross margin increase, cost rate control effect appears. 23H1's gross margin was 60.97 percent, higher than in the same period last year and the first quarter of this year, and 23H1's gross margin grew 34.41 percent, higher than revenue growth. The company strengthened cost control, and the total growth rate of the three fees was 10.42, down 6.50 percentage points from the same period last year; sales, management, and R & D expenses increased by 19.29, -5.32, and 6.65 year-on-year, all lower than the growth rate of revenue.

in terms of human efficiency, the company's per capita income exceeded 250000 yuan, up nearly 28% from the same period last year.

absolute advantage products accounted for more than half of the proportion of revenue, the enterprise market to maintain high growth. The company will be based on market share of the product to carry out a four-tier ladder definition: absolute advantage, market first, market leader, high potential products. Among them, the absolute advantage products not only have the first share, but also have a significant gap with the second and third places, including terminal security, threat discovery and situational awareness, code security, etc. In the first half of the company's absolute advantage products accounted for more than 50% of the overall revenue, the leading position further consolidated. Breakdown, the data security category achieved revenue of 0.58 billion yuan, up more than 40% YoY, while the terminal security category achieved a total revenue of 0.339 billion yuan, more than 41% YoY. At the industry level, the proportion of customer revenue of enterprises, government and the Department of Public Security and Law was 68.71 per cent, 22.14 per cent and 9.15 per cent. Enterprise customers are the main growth engine, with 23H1 growth reaching 36%.

energy, finance and operators accounted for 30% of revenue, an increase of more than 45%. In terms of revenue division, the growth rate of revenue generated by customers above the million level exceeded 40%, the re-purchase rate of customers was nearly 50%, and the output of new customers increased by 63% compared with the same period last year.

released the industry's first industrial-grade large-model application Q-GPT safety robot and large-model guard, AI + safe landing is expected. Q-GPT safety robots are mainly aimed at safety operation and maintenance, and their work efficiency per unit time is 16 times that of safety experts, greatly improving the efficiency of safety operations. Large model security guards are mainly to solve the security risks in the use of large models, such as employees feeding classified information, etc., can help enterprises more safely to the large model for productivity. Customers such as BOE Group and Geely Automobile Group became the first batch of Q-GPT safety robots and large safety model users in China. The combination of AI and security is expected to help both parties greatly improve efficiency and become a new innovative growth point in the industry.

Risks: Macroeconomic impact on IT spending; increased competition in the industry; and less-than-expected new business expansion.

investment advice: maintain a "buy" rating. It is estimated that the revenue from 2023 to 2025 will be 80.10/103.87/13.047 billion yuan, with a growth rate of 29%/30%/26% respectively, and the net profit attributable to the parent company will be 2.77/5.63/0.856 billion yuan, corresponding to the current PE of 133/65/43 times, maintaining the "buy" rating.