\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 588 Yonyou Network Technology Co.Ltd(600588) )、
Event:
The company issued the 2021 annual report after the closing on March 18, 2022.
Comments:
We firmly promoted business transformation and structural adjustment, and the revenue of cloud service business increased by 55.5% year-on-year
In 2021, the company firmly promoted business transformation and structural adjustment, successively stripped off financial service businesses such as changjietong payment and Youjin holding, actively contracted software business and accelerated the transformation of cloud services. The company achieved an operating revenue of 8.932 billion yuan, a year-on-year increase of 4.7%; The net profit deducted from non parent company was 405 million yuan, a year-on-year decrease of 501 million yuan. In terms of business: 1) the revenue from cloud service and software business was 8.641 billion yuan, with a year-on-year increase of 15.7%. Among them, the revenue from software business decreased by 18.0% year-on-year, and the revenue from cloud service business increased by 55.5% year-on-year, accounting for 61.6% of the revenue from cloud service and software business, an increase of 15.8% over the same period last year, and has become the main source of revenue of the company; 2) Revenue from financial services business decreased by 72.5% year-on-year.
High R & D investment supports core application capabilities, upgrades sales organization system and strengthens business promotion
In terms of R & D, the company continued to increase R & D investment, introduce relevant high-end R & D talents, enhance the platform capability and core application capability of cloud service products, and continuously optimize product performance. The R & D investment was 2.354 billion yuan, a year-on-year increase of 40.7%, accounting for 26.4% of operating revenue, an increase of 6.8 percentage points. In 2021, the company developed and officially launched u9 cloud for medium-sized and medium-sized manufacturing enterprises, focusing on specialized and new customer groups to achieve high-quality growth. In terms of sales, the company continued to upgrade its sales organization system, increase customer coverage and business promotion, and the sales cost was 2.027 billion yuan, a year-on-year increase of 31.7%.
Cloud subscription revenue continued to grow rapidly, and the overall revenue growth was affected by business transformation
In 2021, the company’s cloud service business arr reached RMB 1.65 billion, and the contract liabilities related to cloud subscription were RMB 847 million, with a year-on-year increase of 79.0%, laying a foundation for the continuous and rapid growth of the company’s subscription revenue and the continuous upgrading of the company’s business revenue structure. By the end of 2021, the company had added 193200 cloud service paying customers, and the cumulative number of cloud service paying customers excluding financial cloud service customers was 438300. At the same time of business transformation and structural upgrading, the revenue growth of the company’s cloud service and software business is also affected by the following phased factors: 1) the shift from traditional licensing business to subscription business has an impact on the current revenue scale and growth; 2) Gradually promote the implementation and delivery, and provide more services through professional service partners. The subcontracting of implementation and delivery (professional service partners directly sign delivery contracts with customers) not only improves the quality of the company’s business structure, but also has an impact on the company’s 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.
Profit forecast and investment advice company has been deeply engaged in the field of traditional enterprise management software for many years, and the industry position is stable; Cloud service is a strategic development direction. It is in a period of rapid growth and has a broad growth space in the future. It is predicted that the operating revenue of the company from 2022 to 2024 will be 10.756 billion yuan, 12.894 billion yuan and 15.362 billion yuan, the net profit attributable to the parent company will be 962 million yuan, 1.231 billion yuan and 1.508 billion yuan, the EPS will be 0.28, 0.36 and 0.44 yuan / share, and the corresponding PE will be 90.84, 71.01 and 57.96 times. The company is in a critical period of cloud transformation, with more investment in R & D, sales and other expenses and low net profit margin. It is reasonable to adopt PS valuation method. In the past three years, the company’s PS has mainly operated between 7-19 times. Considering the high growth trend of cloud service business, the company maintained its target PS of 13 times in 2022, with the corresponding target price of 40.69 yuan, maintaining the “buy” rating.
Risk tips
Covid-19 recurrent pneumonia; The promotion of cloud service transformation is less than expected; The progress of R & D and promotion of new products is lower than expected; Brain drain; More manufacturers enter the enterprise cloud service market, and the industry competition intensifies
