\u3000\u3000 Yonyou Network Technology Co.Ltd(600588) (600588)
Investment summary:
Company: China’s enterprise cloud service and software leader focus cloud transformation
Industry leader, perfect product line layout. The company has focused on and continued to lead the enterprise software and enterprise service market for 33 years, and its products can meet the needs of enterprises of different sizes, including cloud ERP focusing on internal resources and yonbip business innovation platform focusing on external resources. With the implementation of 3.0 strategy, the company officially launched cloud transformation.
Through ecological strategy, UFIDA integrates high-quality ecological partner products based on standardized products to form joint solutions and realize project delivery.
Industry: digital intelligence, localization and industrial Internet boost market space
The market scale of cloud computing industry is expected to exceed 500 billion. 2021 is the first year for China to enter the 14th five year plan. With the rapid development of digital economy, led by public cloud and followed by private cloud, cloud computing will continue to grow rapidly. It is expected to reach 541.7 billion yuan in 2024, with an annual compound growth rate of 32%.
Demand for digital intelligence: cloud computing is the key premise of digital intelligence. With the rapid development of cloud computing, we believe that the scale of digital intelligence market can reach 65 trillion yuan in 2025, accounting for 55% of GDP. In 2020, the scale of digital economy will be 39.2 trillion yuan, with a five-year compound growth rate of 11%.
Localization trend: through the analysis of customer unit price, penetration rate and quantity of various customers, we believe that the market scale of ERP in the short term (2025) can reach 169.37 billion yuan, and large and medium-sized enterprises are the main source of the market.
Industrial Internet is the second growth point. With the rapid development of 5g technology and the introduction of relevant favorable policies for industrial Internet, we believe that the scale of industrial Internet will exceed 100 billion yuan in 2023, compared with 666.236 billion yuan in 2020, with a three-year compound growth rate of 15.3%.
Core competitiveness: technology leads, high quality and low price, accurate strategy
Products: technology leading, ecological blessing. Yonbip is not just a simple tool software, but an ecological service platform. Compared with foreign enterprises, the optimization of user interface is more in line with the usage habits of Chinese people.
Market: with rich key customer service products and experience. In UFIDA’s customer base, large and medium-sized enterprises and government customers account for more than 80%, and UFIDA has rich experience in serving large customers. Compared with Chinese friends, UFIDA is better at customized services. Large customers have complex customized needs, so UFIDA will have more advantages in subsequent domestic substitution.
Service: full service, beautiful service and low price. Compared with foreign manufacturers, it can respond to customer needs 24 hours. The service and products are of high quality and low price, and the cost performance is higher.
Xinchuang: adhere to independent research and development and lead domestic substitution. Actively respond to the call of Xinchuang in terms of policy, join multiple industry organizations, sign strategic cooperation agreements with Xinchuang related industrial companies, and realize the full coverage of upstream, middle and downstream of Xinchuang; NCC fully supports domestic applications and has excellent safety protection ability.
Customer: customer portrait, accurate service. Make customer portraits according to the characteristics of different volume customers, and then develop products with different needs and formulate different customer service strategies.
Investment advice
We predict that the revenue from 2021 to 2023 will be 9.476 billion yuan, 12.772 billion yuan and 18.628 billion yuan. UFIDA has a rich product line, which meets the needs of customers at all levels, with prominent core competitiveness, high market barriers and obvious advantages for large customers. At the same time, we are optimistic about the strategy of “platform + ecology”. We give the company a 22-year target market value of 152.622 billion yuan and a corresponding target price of 44.41 yuan, covering the “buy” rating for the first time.
Risk tips
Downside risks of economy exceeding expectations, policy adjustments affecting the cloud progress of large state-owned enterprise customers, untimely product R & D iterations affecting project delivery and market risks.
