\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 588 Yonyou Network Technology Co.Ltd(600588) )
The company released its annual report for 2021, achieving a revenue of 8.93 billion yuan (+ 4.7%), a net profit of 710 million yuan (- 28.2%), and deducting a non net profit of 410 million yuan (- 55.3%). The cloud service and subscription business increased significantly, the performance met expectations and maintained the buy rating.
Key points supporting rating
The cloud business grew rapidly and the subscription business continued to advance. During the reporting period, the company’s cloud service revenue reached 5.32 billion yuan (+ 55.5%), accounting for 61.6% of the cloud service and software business revenue, an increase of 15.8% over the same period last year, and has become the company’s main source of revenue. At the same time, the company fully implements the subscription priority strategy, gives priority to the development of public cloud subscriptions, and guides private cloud customers to pay by subscription. The revenue of cloud subscription arr was 1.65 billion yuan, and the contract liabilities increased by 79.0% year-on-year. The company’s cloud transformation strategy has achieved remarkable results, and the cloud business and subscription revenue have achieved rapid growth, laying the foundation for the continuous upgrading of revenue structure.
Enterprise customers are deeply cultivated and the leading position is stable. The company implements a grading system for customers and occupies a leading position in different markets. The large-scale enterprise market realized more than 5 million large orders, with a year-on-year increase of 45%; The medium-sized enterprise market meets the different needs of customers with the combination of yonsuite, u9c and u8c, and the market competitiveness has been strengthened; In the customer market of small and micro enterprises, changjietong continues to focus on the fields of digital intelligence finance and taxation and digital intelligence business to maintain its market leading edge.
Focus on the main business, improve the income structure, continue to invest and enhance the core competitiveness. The company divested its financial business and gradually contracted its software business, focusing on cloud services and subscription services. In the long run, the shift from traditional licensing to subscription business enhances revenue sustainability. The company’s profit fell year-on-year, mainly due to the increase of sales and R & D expenses. Due to the increased coverage of customers and business promotion, the sales expenses increased by 31.7% year-on-year; R & D investment continued to increase, with a year-on-year increase of 16.2%. By focusing on the main business, increasing customer coverage and improving the technology R & D system, the company provides a long-term driving force for the follow-up business development.
Valuation
It is estimated that the net profit from 2022 to 2024 will be 1.063 billion yuan, 1.523 billion yuan and 2.059 billion yuan, EPS will be 0.31, 0.44 and 0.60 yuan, and the growth rate of cloud revenue is expected to be 61%, 54% and 46%, maintaining the buy rating.
Main risks of rating
The progress of cloud transformation is less than expected; The breakthrough of enterprises is less than expected; Cost control is less than expected.
