Guodun Quantum’s revenue fell by nearly 12% in the first three quarters. Can it replicate last year’s big profits in the fourth quarter?

The revenue of Keda Guodun Quantum Technology Co., Ltd. (“Guodun Quantum”, 688027) fell by nearly 12% in the first three quarters.

On the evening of October 28, Guodun Quantum released its third quarter financial report for 2022. The third quarter report shows that the company achieved revenue of 24.56 million yuan in the third quarter, a year-on-year increase of 23.69%; a net loss of 16.06 million yuan, and a net loss of 28.12 million yuan after deduction. At present, the revenue in the first three quarters was 38.76 million yuan, a year-on-year decrease of 11.94%, and the net loss was 61.43 million yuan.

The main financial data of Guodun Quantum in the third quarter, the picture comes from the financial report

Guodun Quantum conducts business around the industrial application of quantum information technology. Its main business is divided into two major sectors: quantum secure communication products and related information security applications, and quantum computing instruments and equipment. According to the 2021 annual financial report, quantum secure communication products and related information security applications are the main sources of revenue, accounting for 75.71%, and quantum computing instruments and equipment accounted for 22.98% of the revenue.

However, due to industry characteristics, Guodun Quantum’s sales revenue shows seasonal fluctuations, mainly in the fourth quarter (especially December). For example, the total revenue in 2021 is 179 million yuan, of which 135 million yuan of revenue will occur in the fourth quarter, which means that 75% of the revenue will be reflected in the fourth quarter.

In addition, since the quantum information industry is a national strategic emerging industry, it is currently supported by national and local industrial policies. In the past two years and the first half of 2022, National Shield Quantum relies heavily on government subsidies, and the amount of government subsidies in the total profit is respectively 70.88 million yuan, 45.11 million yuan and 34.05 million yuan; government subsidies included in the current profit and loss in the third quarter were 12.88 million yuan, and the first three quarters accumulated 46.39 million yuan.

The data shows that the R&D investment of Guodun Quantum is at a high level. The R&D investment in the third quarter was 32.08 million yuan, and the cumulative R&D investment in the first three quarters was 97.8 million yuan. Guodun Quantum’s R&D investment in the first three quarters increased by 94% year-on-year, and the R&D expense rate was as high as 252%.

Guodun Quantum once explained this situation in the 2022 interim report. The company stated that in order to achieve the goal of autonomous and controllable core components, solve the “stuck neck” problem faced by the industry, and at the same time to further maintain the company’s commitment to the field of quantum secure communications and Technological leadership in the field of quantum computing, as well as increased R&D investment and share-based payments.

As of the close on October 28, 2022, Guodun Quantum closed at 99.76 yuan, down 3.26%, with a total market value of 8 billion yuan.