\u3000\u30003 Luolai Lifestyle Technology Co.Ltd(002293) 00229)
The company released its annual report for 2021, realizing a revenue of 1.03 billion yuan (- 21.4%), a net profit of 250 million yuan (- 23.2%), and deducting a non net profit of 210 million yuan (- 38.4%). The company’s core business maintained rapid growth, the performance was in line with expectations, and maintained the buy rating.
Key points supporting rating
Focus on core business and maintain rapid growth of main revenue. During the reporting period, the company achieved a revenue of 1.03 billion yuan (- 21.4%), which is due to the fact that the revenue of the company no longer includes the supporting commercial real estate project of Chengdu subsidiary in 2020 and the Internet marketing revenue of the original holding subsidiary Netcom. If the above effects are not considered, the main revenue increased by 31.83% year-on-year and the core AI products increased by 51.95% year-on-year. The company continues to focus on the development strategy of “semantic intelligence +” and has obvious advantages in its core main business.
Key customers have obvious advantages, and the gross profit margin of market segments has increased. The company actively promotes the application of artificial intelligence and big data, and key customers continue to make breakthroughs. The company signed contracts with customers of financial institutions such as Ping An Bank Co.Ltd(000001) , China Merchants Bank Co.Ltd(600036) , Agricultural Bank Of China Limited(601288) and opened a new mode of cooperative operation of enterprise financial media cloud (SaaS) with China Southern Power Grid. In 2021, the operating revenue of financial, manufacturing, energy and other enterprise customers accounted for more than 1 / 3 of the company’s overall revenue, which increased by 43.4% compared with 2020, and the gross profit margin increased by 12.9 percentage points year-on-year. The company has high customer stickiness and deep moat in advantageous industries.
R & D investment continued to expand and core products were innovated iteratively. The company’s R & D expenses increased by 19.5% year-on-year, and the proportion of R & D investment in operating revenue increased to 20.3%. Compared with 2020, the proportion of R & D investment increased by 6.5 percentage points. Thanks to R & D investment, the company’s core products continue to innovate iteratively. During the reporting period, the company released a number of products around its core business, including TRS Haiwen natural language processing engine V9 0, etc., to create a solid product barrier for the company.
Valuation
It is estimated that the net profit from 2022 to 2024 will be 321, 427 and 511 million yuan, and the EPS will be 0.45, 0.60 and 0.72 yuan (considering the company’s divestiture of non core real estate and Internet marketing projects, the revision will be 16% ~ 17%), and the corresponding PE will be 25X, 19x and 16x respectively, maintaining the buy rating.
Main risks of rating
Revenue growth was lower than expected; Technological breakthrough is less than expected; The expansion of key customers was less than expected.
