\u3000\u3 China Vanke Co.Ltd(000002) 410 Glodon Company Limited(002410) )
Event: on March 28, the company disclosed the annual report of 2021. The operating revenue was 5.562 billion yuan, with a year-on-year increase of 40.92%, and the net profit attributable to the parent was 661 million yuan, with a year-on-year increase of 100.06%. Deducting the net profit not attributable to the parent was 651 million yuan, with a year-on-year increase of 115.93%. The operating revenue was higher than our expectation (5.153 billion yuan), and the growth of net profit attributable to the parent was in line with our expectation (671 million yuan); In the fourth quarter, the operating income was 2.018 billion yuan, a year-on-year increase of 42.48%, the net profit attributable to the parent was 186 million yuan, a year-on-year increase of 84.47%, and the net profit not attributable to the parent was 197 million yuan, a year-on-year increase of 109.66%.
Comments:
The short-term pressure on gross profit margin and operating cash flow is due to business development. The gross profit margin of the company decreased by 95.83% over the same period of last year, mainly due to the rapid growth of the company’s gross profit margin and construction cost, which decreased by 53.4% over the same period of last year. The net cash flow from operating activities of the company was RMB 1.601 billion, a decrease of 14.65% over the same period of last year, mainly due to the strategic adjustment of financial business in the same period of last year and the recovery of some loans and advances. Excluding the above effects, the net cash flow from operating activities was RMB 1.650 billion, a year-on-year increase of 8.57%.
Maintain high R & D investment and consolidate the leading position in the industry. In 2021, the company’s R & D investment reached 1.626 billion yuan, a year-on-year increase of 21.41%, accounting for 29.23% of operating revenue, a year-on-year decrease of 4.70%, and the R & D personnel also increased, from 3289 to 3933, a year-on-year increase of 19.58%. We believe that high R & D investment will help to continue to maintain the company’s leading position in the digital construction industry.
Digital cost: traditional cost income exceeds expectations, and value-added services such as e-government continue to make efforts. In 2021, the revenue of digital cost business was 3.813 billion yuan, with a year-on-year increase of 36.64%, the operating revenue after cloud restoration was 4.353 billion yuan, with a year-on-year increase of 27.90%, the traditional cost revenue was 1.252 billion yuan, with a year-on-year increase of 7.01%, of which the cost cloud revenue was 2.561 billion yuan, with a year-on-year increase of 58.09%, the cloud revenue after restoration was 3.101 billion yuan, with a year-on-year increase of 39.06%. The total cost revenue and traditional cost revenue were higher than our expectations (3.52 billion yuan and 800 million yuan), The cloud revenue and the restored cloud revenue are slightly lower than our expectations (2.72 billion yuan and 3.2 billion yuan). In 2021, the gross profit margin of digital cost business was 92.31%, a year-on-year decrease of 1.86%, mainly due to the growth of e-government business, the corresponding increase of procurement cost and the rapid growth of operating cost. In terms of cloud revenue segmentation, all businesses have achieved rapid growth, with cloud pricing revenue of 924 million yuan, a year-on-year increase of 63.30%, cloud computing volume of 830 million yuan, a year-on-year increase of 61.33%, and engineering information revenue of 807 million yuan, a year-on-year increase of 49.04%; In value-added services, the proportion of operation and maintenance revenue of public resource transaction management system in e-government business continues to increase, and the market-oriented standard clearing products realize the rapid growth of revenue; Won the bid for the 103 million yuan project of Shenzhen smart government platform to achieve full coverage of first tier cities in Beijing, Shanghai, Guangzhou and Shenzhen. Digital cost has a very high gross profit margin. With the regularization of pirated users, the increase of cost cloud product coverage and the continuous promotion of value-added services, it will continue to maintain rapid growth and empower other businesses.
Digital construction: the revenue keeps growing rapidly, and the gross profit margin is under pressure in the short term. In 2021, the revenue of digital construction business was 1.206 billion yuan, a year-on-year increase of 27.82%, slightly lower than our expectation (1.282 billion yuan); The gross profit margin was 65.77%, a year-on-year decrease of 6.30%, mainly due to business growth and the increase in the proportion of solution business, the corresponding increase in procurement costs and the rapid growth of operating costs. The newly signed contract amount has increased rapidly, and the number of service customers has continued to increase. By the end of 2021, the cumulative number of service projects of digital construction project level products has exceeded 55000, and the cumulative number of service customers has exceeded 5000; In 2021, 16000 new projects and 1600 new customers were added. Digital construction business can improve the quality and efficiency of construction enterprises. Under the background of aging population and fine development of construction industry, we continue to be optimistic about the long-term high growth potential of digital construction business.
Digital design: the integration of Hongye Technology has been fruitful, and the income has shown explosive growth. In 2021, the revenue of digital design business was 131 million yuan, a year-on-year increase of 250.12%, higher than our expectation (99 million yuan). The company’s digital cost business has successfully integrated Hongye Technology, and we are optimistic about its high growth potential in the future.
Profit forecast and valuation rating. In the short term, the company’s cost business has strong hematopoiesis ability, and is optimistic about the subsequent improvement of the genuine rate of software and the continuous and rapid growth of revenue and profit scale caused by the improvement of product price after the completion of cloud transformation. In the long run, the market scale of BIM industry will exceed 30 billion in 2025, with a compound growth rate of more than 30%. Facing the blue ocean market, the company continues to increase investment in market expansion and technology R & D, and bears the pressure of cash flow and gross profit margin in the short term, so as to build a foundation for the long-term growth into a BIM integrated platform enterprise. It is estimated that the net profit attributable to the parent company in 22-24 years will be RMB 971 / 1349 / 1735 million, with a corresponding valuation of 60 / 43 / 34 times. Maintain the “buy” rating.
Risk tips: 1 The cost of cloud transformation is less than expected; 2. The informatization development of construction industry is less than expected; 3. Intensified industry competition
