On the evening of April 25, Zhongcong Technology (688777.SH) disclosed its quarterly report for 2022. In the first quarter of 2022, the company achieved operating income of 981 million yuan, an increase of 34.56%; Net profit returned to the mother was 59.8868 million yuan, an increase of 70.94%; The net profit of withholding was 39,50,200 yuan, an increase of 144.78%. Revenue and net profit attributable to the parent have maintained rapid growth for seven consecutive quarters.

The growth of revenue in the first quarter benefited from the strong demand for “digital and intelligent” in the petrochemical, chemical, electric power, metallurgy, medicine, building materials and other industries, and on the other hand was due to the continuous improvement of the company’s ability to focus on digital and intelligent products and services.

The quality of development has been improved, and the overall competitiveness has been continuously enhanced

While the company maintains the rapid growth of “quantity”, the level of “quality” is also further improved, and many indicators of market concern are constantly optimized. During the reporting period, gross profit margin reached 39.14%, an increase of 2.58 percentage points year-on-year. At the same time, the level of expense control was further improved, and the sales expense ratio and financial expense ratio decreased by 2.77 percentage points and 0.12 percentage points year-on-year to 13.22% and 0.30% respectively during the reporting period.

In terms of research and development, the company continues to increase investment in research and development to provide strong support for research and innovation activities. In the first quarter of 2022, research and development expenses were 136 million yuan, an increase of 38.82%, and the proportion of research and development expenses was increased by 0.42 percentage points, rising to 13.81%, significantly higher than the industry average.

Thanks to the enhancement of competitiveness, new breakthroughs have been achieved in project undertaking. At the beginning of the New Year, in the competition with first-class enterprises at home and abroad, the company successfully won the bid for the intermediate control system (FPSO+ platform) of the secondary development project of a large offshore oilfield enterprise; At the same time, it actively promotes the intelligent development of key industries, and has successively achieved breakthroughs in intelligent manufacturing consulting planning projects in LNG and coal chemical industries. In the Beijing Winter Olympics, it also undertook the DCS control system of the “main torch” hydrogen supply main device, which provided a solid technical guarantee for the smooth operation of the project.

Since entering 2022, the company’s brand image and technology have also been further recognized by the market. It has been selected as the “Future Factory” in Hangzhou in 2021, won the four major awards of the 2022 China Automation Industry Annual Meeting, won the “2021 China Intelligent Manufacturing Top 50” and won the recognition of Zhejiang Manufacturing high-quality Development Conference, becoming a typical representative of China’s intelligent manufacturing.

We will push forward the implementation of the ten key tasks and open up new space for growth

The day before yesterday, the company released the 2021 annual report for the first time publicly announced the “ten key tasks” in the process of strategic transformation of the company, proposing that the three strategic control points of “5T technology”, “platform + industrial APP” and “5S store +S2B platform” will be the core, and the three strategic business expansion of international business, S-class large customers, and innovation incubation will be driven by the expansion of international business. Supported by the improvement of the three strategic capabilities of the whole process cost reduction, investment and merger, and emerging business opportunities, the “Ten key tasks” are comprehensively promoted by relying on management reform. Progress has been made on several fronts in the first quarter.

In terms of 5T technology and investment mergers and acquisitions, the company actively explored the low-carbon application of 5T technology, successfully helped Xuyang Group Xingtai Park develop and complete the “carbon management system” at the beginning of the year, and issued an announcement at the end of February to acquire 22% of the equity of petrochemical Yingke with 561 million yuan in cash, to further improve the strategic layout of 5T. Based on industrial software, Sinopec Yingke’s business covers the whole industrial chain of upper, middle and downstream, and has accumulated rich practical experience in the informatization of energy and chemical industry, which can realize complementary advantages and collaborative development with the company. After the completion of this transaction, the company will form a complete business coverage, with highly competitive smart factory overall solution, further improve the 5T strategic layout, can better respond to the new industrial structure, economic structure adjustment brought about by the digital depth transformation needs.

In terms of international business and key customer development, we have achieved major new breakthroughs in international benchmarking customers. In 2021, the company entered the BASF qualified supplier list and realized the formal application of DCS in its factories; In March this year, the company went to the next city, and its holding subsidiaries officially passed the Saudi Aramco supplier audit and successfully entered the Saudi Aramco supplier list. In the future, the company will further explore and deepen new value chain models such as intelligent manufacturing and digital transformation with Saudi Aramco to achieve mutual benefit and win-win and common development.

The “Ten Key Tasks” system comprehensively demonstrates the company’s development focus and goals. In the future, with the continuous breakthrough of new businesses, domestic new industries and overseas new customers, the company is expected to open a larger market space, achieve sustainable high-speed growth and high-quality growth, and leave a deep footprint in the development process of the world’s industrial civilization.