\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 588 Yonyou Network Technology Co.Ltd(600588) )
Event overview
On March 19, 2022, the company released its 2021 annual report. In 2021, it achieved an operating revenue of 8.932 billion yuan, a year-on-year increase of 4.7%, including 8.641 billion yuan of cloud service and software revenue, a year-on-year increase of 15.7%. In 2021, the company realized a cloud service business revenue of 5.321 billion yuan, with a year-on-year increase of 55.5%, and the cloud business continued to maintain rapid growth. In 2021, the net profit attributable to the parent company was 708 million yuan, a year-on-year decrease of 28.18%, mainly due to the company’s continuous increase in R & D investment and upgrading of sales organization system. The R & D investment increased by 40.7% year-on-year and the sales expense increased by 31.7% year-on-year.
The proportion of cloud business continued to increase, and the achievements of cloud transformation strategy appeared
The cloud transformation process affects revenue growth and opens up growth space in the medium and long term. According to the disclosure of the company’s annual report, the total revenue of cloud services and software business increased by 15.7% year-on-year, and the growth rate slowed down compared with 2021h1, mainly for the following three reasons: 1) the traditional licensed business turned to subscription business, and the subscription business recognized the revenue by stages according to the user’s use period, and the transition period affected the current revenue; 2) The company gradually promotes the implementation of delivery, and more of it is provided through professional service partners. The subcontracting of delivery (the professional service partners directly sign the delivery contract with the customer) not only improves the quality of the company’s business structure, but also has an impact on the current revenue; 3) In the second half of 2021, the orders of large projects increased rapidly, and the corresponding implementation and delivery cycle was prolonged, resulting in the delay of revenue recognition. We believe that these factors are short-term effects. In the long run, cloud transformation is expected to bring more sustainable revenue to the company, greatly expand the company’s accessible business scope and open up growth space.
The cloud business is advancing smoothly, and the development results are gradually emerging. In 2021, the company achieved a cloud service revenue of 5.321 billion yuan, accounting for 59.6% of the total revenue, which continued to increase and achieved remarkable results. Specifically:
1) cloud revenue structure: according to the disclosure of the company’s annual report, the cloud revenue of large enterprises will reach 3.735 billion yuan in 2021, with a year-on-year increase of 45.4%; The cloud revenue of medium-sized enterprises was 393 million yuan, a year-on-year increase of 150.3%; The cloud revenue of small and micro enterprises was 509 million yuan, a year-on-year increase of 111.2%; The cloud revenue of the government and other public organizations was 684 million yuan, a year-on-year increase of 50.0%, and all business lines achieved good development.
2) the number of customers and the renewal rate: according to the official account of the company and the WeChat public number, in 2021, the company added 19.32 customers to cloud services, and the total number of cloud customers paid for excluding the financial cloud business customers reached 43.83 million. In 2021, the renewal rate of large customers was 103%, that of medium-sized customers was 73%, and that of small and Micro customers was 83%. The renewal rate of large customers remained at a high level, and the overall customer expansion was good.
3) cloud contract liabilities: according to the disclosure of the company’s annual report, the company’s cloud service related contract liabilities in 2021 were RMB 1.58 billion, with a year-on-year increase of 45.4%, of which the cloud contract liabilities related to subscription were RMB 847 million, with a year-on-year increase of 79.0%. Cloud contract liabilities continued to grow rapidly.
4) from the perspective of annual recurring revenue (ARR): according to the disclosure of the company’s annual report, the company’s arr reached 1.65 billion yuan in 2021, and arr represents the cloud business revenue of subscription payment. Based on this, it is estimated that the proportion of the company’s subscription revenue in the cloud business revenue in 2021 will reach 31%. Subscription revenue is a sustainable revenue, reflecting the continuous optimization of the company’s cloud business revenue structure.
5) cloud ecological construction: according to the disclosure of the company’s annual report, in 2021, the company implemented five ecological plans by promoting the ecological integration strategy of strategic alliance, integration and integration, cloud market, service integration and platform operation, with more than 2200 business partners, 970 ISV partners (including 530 changjietong ISV partners), 370 professional service partners and 1700 cooperative banks, Cloud market application mall has more than 10000 settled partners, more than 15000 settled products and 126 listed integrated products.
The layout of large-scale enterprises has been transformed into intelligent ones
Policy driven large enterprises represented by state-owned central enterprises to start digital intelligence transformation. On March 2, 2022, the official website of the SASAC issued the guidance on central enterprises to accelerate the construction of a world-class financial management system, proposing to “promote the transformation of financial management from informatization to digitization and intelligence”. On March 16, the official website of the SASAC issued the announcement on the establishment of the science and technology innovation Bureau. We believe that the wave of digital intelligence transformation of large enterprises represented by state-owned enterprises has come, and the capital expenditure of large enterprises on digital intelligence transformation is expected to increase in the future.
The company actively layout, large enterprise customers expand smoothly. In terms of large enterprises, relying on the strategic product yonbip, the company made a positive layout and made a great breakthrough in 2021. The main achievements are as follows:
1) product dimension: according to the disclosure of the company’s annual report, in 2021, the company successively released yongbip flagship versions 202102, 202105, 202109 and 202111, further consolidating the cloud platform. Nccloud has released the 202105 standard cloud native and 202111 standard cloud native, and the products have completed all lightweight upgrades. Nccloud and yonbip sensitive cloud services are fully integrated to form an integrated and digital intelligent solution.
2) customer dimension: 2) customer dimension: customer dimension: according to the disclosure of the annual report, in 2021, according to the disclosure of the annual report, in 2021, according to the disclosure of the annual report, in 2021, the company will break through more than 10 overall contracts at the level of Central enterprises in central enterprises in central enterprises in central enterprises in the year 2021, with the company’s annual report, the company’s annual report, the company’s annual report, in 2021, 2021, according to the disclosure of the annual report, in 2021, the company’s 2021 year of the year of 2021, the company’s breakthrough in more than 10 overall signing at the central enterprise level in 2021, and the successful signing of Soyea Technology Co.Ltd(000909) 090901 \clients.
3) revenue order dimension: according to the disclosure of the annual report, in 2021, the company realized a revenue of 5.87 billion yuan from large enterprise software and cloud services, a year-on-year increase of 17%. The amount of large orders of more than 5 million yuan increased by 45% year-on-year.
Investment advice
UFIDA, as a leading company in China’s enterprise level service market, is expected to benefit from the current digital intelligence transformation needs of state-owned enterprises and realize the goal of transformation to platform and ecological enterprises by relying on BiP strategic products. We expect the company to achieve an operating revenue of 10.78/13.75/17.95 billion yuan in 2022 / 23 / 24, with a year-on-year increase of 20.7% / 27.5% / 30.5%. The net profit attributable to the parent company was RMB 860 / 12.0 / 1.68 billion, with a year-on-year increase of 21.3% / 39.3% / 40.1%. Maintain the investment rating of buy-a. considering that the company is still in the investment period, PS is used for valuation, and the six-month target price is maintained at 34.59 yuan, which is equivalent to 11 times the dynamic market sales rate in 2022.
Risk warning: epidemic spread outside China; The investment in informatization is less than expected; Project delivery is under pressure.
