\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 588 Yonyou Network Technology Co.Ltd(600588) )
Key investment points
Event: the company released its annual report for 2021, realizing an operating revenue of 8.93 billion yuan, a year-on-year increase of 4.7%; The net profit attributable to the parent company was 710 million yuan, a year-on-year decrease of 28.2%. Considering that the company is in the key stage of business structure transformation, the adjustment of traditional software business and financial services affects the report data to a certain extent. The revenue of key cloud service business is 5.32 billion yuan, with a year-on-year increase of 55.5%, with a good momentum of promotion, and the subsequent performance release is worth looking forward to.
The cloud transformation strategy has been effective and achieved an inflection point level breakthrough. During the reporting period, the company took the initiative to shrink the traditional software business, successively stripped off the financial services business, accelerated the cloud transformation strategy, and structurally enhanced the subscription business. The company’s “cloud + software” realized a revenue of 8.64 billion yuan, a year-on-year increase of 15.7%, of which the software business realized a revenue of 3.32 billion yuan, a year-on-year decrease of 18.0%; Cloud business revenue reached 5.321 billion yuan, an increase of 55.5% year-on-year, accounting for 61.6%, an increase of 15.8pp over the same period last year, surpassing software business for the first time and becoming the main source of revenue of the company. Meanwhile, the company’s cloud subscription arr reached 1.65 billion yuan, an increase of 97.9% over H1 in 2021, and the contract liabilities related to cloud subscription reached 850 million yuan, a year-on-year increase of 79.0%. The key indicators of cloud services achieved rapid growth, laying the foundation for the continuous recognition of subsequent revenue.
Targeted operation has yielded fruitful results, and the product matrix is output together. The company’s product matrix has been continuously improved, the layered business strategy has achieved remarkable results, and the customer expansion is good. 1) Large enterprises: continue to iterate the flagship products of yonbip and nccloud, maintain the dominant position of large enterprises in the market, realize the amount of large orders of more than 5 million, with a year-on-year increase of 45%, and the cloud service revenue reached 3.73 billion yuan, with a year-on-year increase of 45.4%. 2) Medium sized enterprises: yonsuite, u9c and u8c have formed a strong product portfolio. The medium-sized enterprise market has made great breakthroughs, and the cloud service revenue reached 390 million yuan, a year-on-year increase of 150.3%. 3) Small and micro enterprises: changjietong realized a comprehensive shift to public cloud services, realizing a cloud revenue of 510 million yuan, a year-on-year increase of 111.2%. 4) Government and other organizations: yondif obtained 10 provincial centralized financial cloud markets, and the cloud service revenue reached 680 million yuan, a year-on-year increase of 50.0%.
The fixed increase was successfully implemented, and it was driven by the repurchase of enabled talents again. The company’s fixed increase issuance was successful, raising a total of 5.298 billion yuan, of which 4.597 billion yuan was invested in yonbip construction project, 628 million yuan was used for the construction of phase III R & D center of UFIDA Industrial Park (Nanchang), and 73 million yuan was used to supplement working capital and repay bank loans. The core technical competitiveness of flagship products is expected to be further strengthened. In addition, the company issued a repurchase announcement on March 21. The total amount of shares repurchased reached 600-1 billion yuan, which will be used for employee incentive in the future, which is conducive to further mobilizing the enthusiasm of employees and boosting the realization of the company’s strategic objectives.
Profit forecast and investment suggestions. It is estimated that the compound growth rate of net profit attributable to parent company from 2022 to 2024 will be 30.0%. Under the background of current localization and digitization strategy, the company’s enterprise digital intelligence products usher in major development opportunities; At the same time, the company’s cloud transformation has achieved an inflection point level breakthrough, the cloud service business has become the main source of revenue, the performance of various key indicators is excellent, and the subsequent revenue growth and quality are expected to be further enhanced. Using the distributed valuation method, the company will be given 13 times PS for cloud business and 30 times PE for traditional software business respectively. The comprehensive target market value of the company in 2022 will be 122.03 billion yuan, with the corresponding target price of 35.52 yuan. It will be covered for the first time and given a “buy” rating.
Risk tip: the company’s cloud transformation is less than expected, the expansion of large and medium-sized customers is less than expected, the epidemic repeatedly affects the delivery, and the industry competition intensifies.
