On October 30, Qianxin (688561. SH) released its third quarter report for 2024, and the company has built a leading safety system and steadily improved the quality of its operations. According to the financial report, the company's operating income in the first three quarters was 2.711 billion yuan, the net operating cash flow increased by 457 million yuan over the same period last year, and the net profit attributable to the parent company increased by 46.94 million yuan year-on-year. In the first three quarters, the three fees decreased significantly year-on-year, opening up a new situation for the company's operation.

Optimization of operation quality The amount of three fees decreased by 24.15% year-on-year

In the first three quarters, the company's operating quality improved significantly, with net operating cash flow increasing by 457 million yuan year-on-year, and net profit attributable to the parent company increasing by 46.94 million yuan year-on-year. In terms of expenses, the company's three fees in the first three quarters totaled 2.609 billion yuan, a year-on-year decrease of 24.15%.

In terms of customer composition, million-level customers have become the main source of the company's income, with more than 1 million large customers accounting for more than 67% of the revenue, and more than 5 million large customers accounting for more than 17% of the company's operating income.

During the reporting period, the company won a number of large orders of nearly 10 million yuan in a number of industries such as finance, manufacturing, energy, and political data, such as the integrated security project of a data center cluster of "Eastern Data and Western Computing", and the centralized procurement project of China Telecom's security brain. According to public data, Qianxin has occupied nearly 70% of the market share in the field of information and innovation terminal security, and has a market share of more than 80% in the central government, ministries and commissions, and directly affiliated institutions.

The core technical capabilities lead the industry in the "data triangle" to systematically solve data security problems

In the context of national digital transformation, Qianxin focuses on the layout of the data security market, and sets the improvement of core competitiveness and influence in the field of data security as the main special, ranking first in the data security software market for two consecutive years.

IDC's 2014 Worldwide Cybersecurity Spending Guide predicts that China's cybersecurity market will grow rapidly from 12.35 billion yuan in 2022 to 23.32 billion yuan in 2027, with a compound annual growth rate of 13.5%, higher than the global average. In addition, in the cybersecurity software market, data security software is the largest sub-market of software at a five-year compound growth rate of 20.4%.

Qi Xiangdong, chairman of Qi'anxin Group, proposed that data security presents a "data triangle" relationship between production, application and circulation, and the "data triangle" supports and influences each other, and its security problems cannot be solved in isolation. Only by building a unified and systematic security system, focusing on the three key points of systematic protection, integrated operation, and three-level linkage command, and solving security concerns, can the digital economy develop rapidly.

The CITIC Securities (Rights Protection) research report pointed out that with the official release of the "Regulations on the Management of Network Data Security" and the subsequent implementation, the importance of data security will increase day by day, which will drive the demand of the network security industry to improve. Cyber security companies are expected to fully benefit from the expansion of product lines, the ability to provide solutions, and the accumulation of industry customer resources.

The completion of the increase in the holdings of China Electronics is of significant strategic synergy

In July this year, China Power Financial Investment, a wholly-owned subsidiary of China Electronics, a strategic shareholder of Qianxin, planned to increase its stake in the company by 5% through an agreement transfer. After the completion of the transaction, CEC will control a total of 23.10% of the company's total share capital through CLP Financial Investment and Mingluo Investment, which shows its strong confidence and support for Qianxin.

From the perspective of strategic significance, Qianxin, as a member of China Electronics, will greatly enhance the synergy between China Electronics in terms of strategy, business and capital supply. It will help Qianxin further optimize the equity structure, enhance market influence and competitiveness, and consolidate the company's industrial status as the backbone of national network security.

Analysts pointed out that the network security industry is driven by policy compliance and industrial upgrading, and the market concentration is gradually increasing, and the development advantages of the head network enterprises represented by Qianxin are obvious. IDC analysts said that with the continuous progress of digital transformation, artificial intelligence and large models, the development and implementation of emerging technologies will benefit the network security market and create a broad development space and opportunities for the future network security market.