\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 588 Yonyou Network Technology Co.Ltd(600588) )
Event description:
On March 18, 2022, the company released its annual report for 2021. During the reporting period, the company realized an operating revenue of 8.932 billion yuan, a year-on-year increase of 4.7%, a net profit attributable to the parent company of 708 million yuan, a year-on-year decrease of 28.2%, and EPS of 0.22 yuan. In the 21st year, the revenue from the main business “cloud + software” was 8.641 billion yuan, with a year-on-year increase of 15.7%, of which the revenue from cloud business reached 5.321 billion yuan, with a year-on-year increase of 55.5%.
Viewpoint Description:
The performance in 21 years (mainly cloud revenue) is slightly lower than our previous forecast for the following reasons:
Subscription income will reduce the scale of current income. The company is making every effort to transform the traditional licensing business into subscription business. The revenue of subscription business is recognized by stages according to the user’s use period. In the business transformation stage, it will have an impact on the current revenue scale and growth rate, but it will bring sustained and considerable cash flow to the company, and will have a positive impact on the company’s subsequent business revenue, gross profit and revenue sustainability.
Subcontract delivery will reduce the contract amount. The company’s ecological strategy will be further expanded and gradually implemented. More delivery will be provided through ecological partners. Subcontracting delivery will certainly have an impact on the company’s current income, but it will certainly have a positive effect of “reducing cost and increasing income” in the long run.
The confirmation period of large projects is long. In the second half of 2021, the orders of large projects increased rapidly. Large projects have the attribute of cross year delivery and long delivery cycle, which will lead to the delay of final collection. Although the performance is not as good as we expected, we are still optimistic about UFIDA 3.0-ii strategy for transformation to cloud services. The main reasons are as follows:
Cloud service revenue accounts for 59% and has become the main source of revenue. The company took the initiative to shrink its software business, accelerated the transformation strategy to cloud services, structurally enhanced its subscription business, strengthened ecological construction, promoted subcontracting delivery, and achieved an operating revenue of 8.931 billion yuan, a year-on-year increase of 4.7%. The company’s main cloud service and software business revenue reached 8.641 billion yuan, with a year-on-year increase of 15.7%. Among them, the cloud service business revenue increased by 55.5% year-on-year, accounting for 59.56% of the revenue, which has become the company’s main source of revenue.
Subscription revenue grew rapidly and the revenue structure continued to be optimized. During the reporting period, guided by the breakthrough of high-quality business income structure, the company fully implemented the subscription priority strategy, gave priority to the development of public cloud subscription business, guided private cloud customers to pay by subscription, and increased the assessment of subscription income indicators. The ARR of cloud service subscription reached 1.65 billion yuan, and the liability of cloud subscription contract reached 850 million yuan, an increase of 79% year-on-year.
Ecological strategy is advancing rapidly, and its development is “quality” and “quantity”. With UFIDA BiP as the core of the ecological strategy, by promoting the integration strategy of strategic alliance, integration and integration, cloud market, service integration and platform operation, and implementing the five ecological plans of Lihe, release, promotion, Chihiro and Huizhi, yonstore has more than 10000 settled partners, with a year-on-year increase of 25%, more than 15000 products, a year-on-year increase of 25%, more than 2200 business partners and 970 ISV partners, There are over 1700 cooperative banks.
Layered operation and deep cultivation of large, medium, small and Micro customers. Rely on the opportunities of Xinchuang to conquer central state-owned enterprises and private enterprises such as CNNC group, Aerospace Hi-Tech Holding Group Co.Ltd(000901) group, China Mobile and Huawei in the large enterprise market; In the medium-sized enterprise market, with yonsuite, u9cloud and other products, seize the “specialized and special new” customer market, and sign a number of model customers such as Jiangsu ZhongfuDa Co., Ltd. and Shandong nuclear power equipment; In the small and micro enterprise market, changjietong continues to make efforts and focus on the two major fields of digital intelligence finance and taxation and digital intelligence business, leading the industry.
Profit forecast and investment suggestions:
According to the information disclosed in the annual report of 2021, we adjusted the performance forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 1.039 billion (12.773 billion before adjustment), 14.22 billion (18.630 billion before adjustment) and 18.098 billion (New), with EPS of 0.57 yuan, 0.70 yuan and 0.72 yuan respectively. In response to the market value on March 18, the PS of 22 / 23 / 24 years is 8 / 6 / 5 times.
In the past 22 years, for cloud computing SaaS company, wind unanimously expected the PS to be 10 times. UFIDA is a leading enterprise, with great advantages in products, customer market, ecology and services. Cloud revenue accounts for nearly 60% of revenue, leading the industry’s cloud transformation. At the same time, subscription revenue is growing rapidly. We maintain the “buy” rating.
Risk tip: macroeconomic downside risk, cloud business transformation does not meet expectations, product R & D progress is less than expected, and market competition intensifies.
