\u3000\u3000 Iflytek Co.Ltd(002230) (002230)
Investment summary:
Events: 1) the company held the 2021 annual cloud Conference on January 29, reviewed the operating results in 2021 and looked forward to the operating expectations in 2022; 2) The company released the minutes of investor research activities on February 13 and 14, and split and expressed in detail the business segments and revenue objectives at the end of the 14th five year plan.
Content:
The company disclosed that in 21 years, affected by the change of government and financial constraints, 2G business slowed down to 10% – 20% growth as a whole, but 2c, operators and automobile business grew rapidly. In 21 years, the growth rate of the company’s total revenue was more than 30%, and the enterprise tax increased by 32% from 754 million in 2020 to 998 million in 2021.
In the expectation of 2022, the company has set revenue / gross profit growth targets respectively according to the business line, and split the revenue of 100 billion in 2025. Education / platform 2C / medical / city / operator / automobile are 30 / 200 / 200 / 100 / 10 billion respectively.
View: looking forward to the future, we believe that the revenue growth rate in 2022 is expected to gradually improve with the recovery of 2G business. From the perspective of 2G business environment, the change of leadership of local grass-roots governments will be completed around March 2022. We believe that the impact on the company’s 2G project is expected to be weakened and the relationship between government and enterprises can withstand the test.
In terms of financial funds, we believe that adhering to the strategy of taking root in the just needed base area enables the company to win more project funds.
The company’s education and medical care are just needed for the country to ensure people’s livelihood, and digitization is the key infrastructure investment direction during the 14th Five Year Plan period. We believe that under the current tight financial situation, both people’s livelihood and new infrastructure can receive relatively priority financial support, The strategic base business operated by the company for many years will bring more comparative advantages to the company in the next two years.
From the perspective of teaching students according to their aptitude, under the influence of the change of government + tight finance + epidemic situation, the income of the company’s teaching students according to their aptitude program can still maintain a growth rate of 48% in the past 21 years, and more than 20 orders have been added at the county level, which fully shows that the company’s education base business has withstood the test of 2021. We believe that with the change of government and the reduction of the impact of the epidemic situation, The education sector can support the company’s performance growth in the short term and maintain the view of education in the short term.
In terms of funds, we believe that we should focus on tracking the 2022 budget of government procurement and government procurement services of local education bureaus. At present, the amount of corresponding subjects of education bureaus in Hefei, Wuhan and Shanghai in 2022 has increased compared with that in 21 years.
To sum up, we believe that the growth rate of the company’s 2G business will be repaired in 2022, which will drive the growth of the company’s revenue. Therefore, we are optimistic about the growth space of the company’s performance in 2022. We revised the business revenue from 2021 to 2023 to 17.616/255.39/36.862 billion yuan, corresponding to eps0 72 / 0.94 / 1.19, give 65 times PE, target price 61.1 yuan, and maintain the “overweight” unchanged.
Risk tips: macro risks, policy risks, difficulties in winning the bid for education and medical smart city, agency channel risks, slow development of 2C business, reduction of government subsidies, asset impairment, falling price and non operating losses.
