Key investment points
The forward steady-state net interest rate is an important index for quantifying the PS valuation of cloud computing companies: we have derived the general formula of PS Valuation: PS = peg × gS × NMt × one hundred (GS is the compound growth rate of the company’s revenue in the next three years, and NMT is the company’s forward net interest rate) as an important reference for selecting the PS valuation multiple. In the case of general technology companies with PEG > 1, the value of PS can be obtained from the company’s revenue growth rate and the forward steady-state net interest rate. By giving the general method for estimating the forward steady-state net interest rate, we can further quantify the PS of cloud computing companies Valuation can also form a more rational understanding of the long-term actual profit quality of cloud computing companies.
The customer structure of cloud computing companies determines the charging mode: we calculate the average payment cost of customers under the two modes of buyout system and subscription system, and deduce that the customer structure of cloud computing companies determines the charging mode. Generally speaking, the larger the enterprise scale, the longer the service life. Small and medium-sized customers have a higher acceptance of the subscription system, while large enterprises have a longer life, and are more inclined to adopt the buyout charging system.
Assuming that the main difference between the company’s long-term and current cost structure comes from the increase in the proportion of repurchase orders, calculate the company’s long-term steady-state operating profit margin: for standardized software products, there is no obvious difference in operating revenue and operating cost between buyout system and subscription system, and the difference mainly lies in the investment in repurchase orders and new orders in period expenses, That is, it is invested in the period expense ratio of old customers and new customers, which determines the operating profit margin that new and old customers can bring. The difference between the forward cost structure and the current cost structure mainly comes from the proportion of repurchase orders in the total orders. In the forward, with the increase of the number of existing customers and the slowdown of the company’s growth, the proportion of repurchase orders will increase. Therefore, the company forward
The long-term steady-state operating profit margin is mainly related to the long-term income retention rate of the company: we take Yonyou Network Technology Co.Ltd(600588) as an example to calculate its long-term steady-state operating profit margin of about 36%, and conduct sensitivity analysis on the variables involved in the calculation, Including: long-term income retention rate of the company (revenue from retained old customers in year n + 1 / total revenue in year n) has the greatest impact on the results. Every change of 1PCT will lead to a change of profit margin of 1.1pct, indicating that the revenue retention rate is an important indicator for us to investigate the company’s profit margin. In addition, the operating profit margin of repurchase customers has a greater impact on the results than that of new customers. It can be seen that when the company has a large amount of retention in the long term When the deposit customers have strong stickiness, the expansion of the market has little impact on the company’s profit margin. The profit quality in re purchase customers is an important factor determining the company’s profitability.
Risk warning: Based on the existing cost structure; The differences between companies other than financial indicators are not considered; The business model of cloud computing companies may change in the long term.
