\u3000\u30003 Luolai Lifestyle Technology Co.Ltd(002293) 00229)
Event: the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 1.029 billion yuan, a year-on-year decrease of 21.44%, and a net profit attributable to the parent company of 246 million yuan, a year-on-year decrease of 23.00%, which is basically in line with our expectations.
Key investment points
Rapid growth of core business income and profit: in 2021, the company achieved an operating income of 1.029 billion yuan. Since the operating income of the company in 2021 no longer includes the income of supporting commercial real estate projects of Chengdu subsidiary in 2020 and the Internet marketing income of Netcom, the original holding subsidiary, the actual main business income increased by 31.83% year-on-year; The net profit attributable to the parent company was RMB 246 million. Excluding the impact of accidental income in 2020, the actual profit of main business increased by 33.28% year-on-year. In terms of products, the company’s revenue of big data software products and services in 2021 was 516 million yuan, a year-on-year decrease of 6.47%, and the gross profit margin was 70.81% (+ 7.8pct); The revenue of artificial intelligence software products and services was 181 million yuan, with a year-on-year increase of 51.95% and a gross profit margin of 73.75% (+ 0.09pct); The revenue of safety products was 143 million yuan, with a year-on-year increase of 7.63% and a gross profit margin of 73.72% (- 5.61pct); The revenue from system integration and other businesses was 190 million yuan, with a year-on-year increase of 210.72% and a gross profit margin of 18.76% (+ 0.56pct).
Accelerated implementation of industrial application scenarios: the company continued to strengthen industrial applications. In the financial, manufacturing, energy and other enterprise customer markets, its products have been applied to five major state-owned banks, three major policy banks and 50% joint-stock commercial banks to assist energy enterprises in digital transformation and open a new mode of cooperative operation with China Southern Power Grid. In 2021, the revenue of financial, manufacturing, energy and other enterprise customers increased by 43.38% year-on-year, Revenue accounted for more than 33%. In the public security market, the software and hardware integrated products and solutions such as security data exchange system and security video exchange system of the wholly-owned subsidiary Tianxing Wangan are applied to industries such as public security and law enforcement, with the market share in the forefront. The public opinion monitoring and analysis business is in the leading position in China, realizing the landing of large orders. In 2021, the revenue of security related markets such as public security increased by 104.84% year-on-year, accounting for nearly 37% of the revenue.
Continue to increase R & D investment and increase the proportion of SaaS: the company focused on the core main business “semantic intelligence +” and continued to increase R & D investment. In 2021, the R & D investment was 209 million yuan, accounting for 20.30% of revenue, and the R & D investment increased by 15.51% year-on-year. In 2021, the company launched a number of new products such as cloud native technology midrange and AI driven data midrange. The proportion of SaaS products and services increased rapidly, and the revenue accounted for 36.84% in 2021. In February 2022, the company signed a strategic cooperation agreement with Bluefocus Intelligent Communications Group Co.Ltd(300058) to build a digital virtual human and jointly promote its application in media, finance, government, enterprise digital marketing and other meta cosmic scenarios. In the future, the company will continue to focus on intelligent virtual human, data element market, energy big data intelligence, open source intelligence, information innovation and other innovative businesses around semantic intelligence, and turn to SaaS, DAAS Kaas mode cloud and intelligent data services.
Profit forecast and investment rating: considering that the company continues to increase investment in R & D, we will reduce EPS from 0.49/0.64 yuan to 0.45/0.58 yuan in 20222023, and it is expected that EPS will be 0.73 yuan in 2024. The current market value corresponds to 25 / 19 / 15 times of PE from 2022 to 2024. The company’s customers have strong rigid demand attribute, leading market share in financial media, network public opinion and other segments, and innovative businesses such as Xinchuang business and intelligent virtual human have brought increment and maintained the “buy” rating.
Risk warning: the promotion of relevant policies is not as expected; The business transformation of cloud and data services was less than expected.
