\u3000\u3 Shengda Resources Co.Ltd(000603) 613 Beijing United Information Technology Co.Ltd(603613) )
Events
The company recently released the performance forecast of the first quarter report of 2022: during the reporting period, it is expected to realize the attributable net profit of 145153 million yuan, a year-on-year increase of 85.85% – 96.10%, and the attributable net profit after deduction is expected to be 140148 million yuan, a year-on-year increase of 83.70% – 94.19%. In this regard, our comments are as follows:
Key investment points
The performance of 2022q1 increased significantly and the commodity trading business continued to grow
The significant increase in 2022q1’s performance was mainly due to the growth of online commodity trading revenue. Duoduo e-commerce continued to vigorously implement active and efficient upstream and downstream strategies. The platform transaction volume increased rapidly, driving the growth of revenue and gross profit, thus realizing the growth of net profit. During the reporting period, the revenue is expected to reach 11.6-11.2 billion yuan, with a year-on-year increase of 90.91% – 100.78%. The continuous high growth of the company’s performance mainly benefits from the development trend of industrial Internet and the company’s good business model. According to the company’s announcement, at present, the overall market space of the company’s multiple platforms exceeds 4 trillion yuan, while the company’s revenue in 2021 is only 37.3 billion yuan, and the overall penetration rate is less than 1%. Referring to the penetration rate of e-commerce of consumer goods, the penetration rate of e-commerce of industrial products still has a great room to improve in the future, and it is expected that the industry will continue to develop rapidly.
Cloud factory has made steady progress and SaaS like model has created stable performance
The company’s core strategy is “platform, technology and data”. From the perspective of platform, Duoduo platform model and performance growth are developing well. In terms of technology, it is the digital cloud factory business being promoted. At present, the digitization of the company’s cloud factory mainly involves nine sectors: management digitization, quality inspection digitization, safety monitoring digitization, energy consumption digitization, logistics digitization, production digitization, order investigation digitization, equipment management digitization, personnel positioning and digital implementation of high-altitude inspection, etc. The company’s digital transformation of the cloud factory is a continuous iterative upgrading process, which will continuously increase this digital solution according to the demand. The cloud factory has obvious effects in cost reduction, efficiency increase and supply chain optimization.
The company’s cloud factory service mode is: Based on the strong cooperation stickiness, positive distribution and trust relationship between cloud factory and Duoduo platform at the transaction end and supply chain end, the company adopts the first input and then charging mode, that is, it is charged according to the effect of cost reduction and efficiency increase, and it is appropriately distributed in the production income. If the fee is charged according to the tonnage of production, a service fee of 10-20 yuan / ton will be charged. The capacity of the contracted cloud factory is generally 1 Shenzhen Fountain Corporation(000005) 00000 tons / year, that is, the technical service fee can reach 1-5 million tons / year in the future. The initial investment in the digital transformation of cloud factory is paid by the company, generally ranging from 2-5 million for each company. In 2021, 20 cloud factories have been signed, and 30-40 more are planned to be signed in 2022. When the number of cloud factories reaches a certain level, this kind of SaaS mode can create stable performance and cash flow for the company.
Profit forecast
We are optimistic about the development prospect of industrial Internet and the leading position of the company. According to the performance forecast of the company’s first quarterly report, we raise the company’s profit forecast. It is predicted that the net profit attributable to the parent company in 20212023 will be 574 million yuan, 939 million yuan and 1493 million yuan respectively, and the EPS will be 167, 273 and 4.34 yuan respectively. The current share price corresponds to 67, 41 and 26 times of PE respectively, maintaining the “recommended” investment rating of the company.
Risk tips
The lower than expected risk of Duoduo platform expansion, the lower than expected risk of cloud factory promotion, the risk of intensified competition, the risk of repeated epidemics and the risk of macroeconomic downturn.
