\u3000\u3 China Vanke Co.Ltd(000002) 410 Glodon Company Limited(002410) )
Matters:
The company announced in its 2021 annual report that in 2021, it achieved a total operating revenue of 5.619 billion yuan, a year-on-year increase of 40.32%, a net profit attributable to the parent company of 661 million yuan, a year-on-year increase of 100.06%, and EPS of 0.5636 yuan. The profit distribution plan for 2021 is: it is proposed to allocate 3 yuan (including tax) for every 10 shares, and the capital reserve will not be converted into share capital.
Ping An View:
The company achieved rapid growth in revenue and outstanding performance. According to the company’s announcement, the company achieved a total operating revenue of 5.619 billion yuan in 2021, a year-on-year increase of 40.32%, and a net profit attributable to the parent company of 661 million yuan, a year-on-year increase of 100.06%. The company’s apparent revenue and net profit attributable to the parent company have achieved rapid growth. The balance of contract liabilities related to cloud transformation (cloud advance collection) of the company in 2021 was 2.047 billion yuan. If the influencing factors of cloud contract liabilities are restored, the total operating income after restoration is 6.156 billion yuan, with a year-on-year increase of 33.21% in the same caliber; The net profit attributable to the parent company after reduction was 1.144 billion yuan, with a year-on-year increase of 29.19% in the same caliber. The performance of the company after restoration is still bright.
The company’s gross profit margin and period expense rate decreased year-on-year, and R & D investment continued to grow rapidly. The gross profit margin of the company in 2021 was 84.12%, a year-on-year decrease of 4.53 percentage points, mainly because the gross profit margin of the company’s digital cost business and digital construction business decreased by 1.86 percentage points and 6.30 percentage points respectively year-on-year. The company’s expense rate during 2021 was 70.58%, down 9.33 percentage points year-on-year, indicating that the company’s expense control effect was remarkable. In 2021, the company continued to strengthen R & D investment. The amount of R & D investment reached 1.626 billion yuan, with a year-on-year increase of 21.41%. The amount of R & D investment maintained a rapid growth, and the revenue of R & D investment accounted for 29.23%. In terms of net operating cash flow, the net operating cash flow of the company in 2021 was RMB 1.601 billion, exceeding the net profit attributable to the parent company in the same period by RMB 940 million, and the profit quality of the company remained at a high level.
The cloud transformation of the company’s digital cost business has been fruitful, and the proportion of cloud revenue has further increased. 2021 is a year connecting the preceding and the following in the company’s “August 3rd” strategic planning period. The company’s digital cost business cloud transformation covers the whole country. The last four regions of cost business, Jiangsu, Zhejiang, Anhui and Fujian, began to enter a comprehensive cloud transformation, and the transformation rate of new transformation regions and the renewal rate of old transformation regions have increased. By the end of 2021, the conversion rate and renewal rate of the transition regions had exceeded 85% in 2017 and 2018, the conversion rate and renewal rate of the transition regions had exceeded 85% and 90% in 2019, the conversion rate of the transition regions had reached 80% and the renewal rate had exceeded 85% in 2020, and the conversion rate of the new transition regions had exceeded 60% in 2021, which was further improved compared with the first year of the previous transition regions. In 2021, the company’s digital cost business realized a revenue of 3.813 billion yuan, a year-on-year increase of 36.64%. If the balance of the liabilities of the cloud contracts is reduced, the adjusted digital business income will be 4 billion 353 million yuan, up 27.90% from the same year. The company’s contract revenue and cloud related liabilities increased significantly by rmb3.17 billion and rmb2.59 billion respectively year-on-year, with a year-on-year increase of rmb3.57 billion and rmb2.57 billion respectively. The company’s cloud revenue accounted for 45.58% of the company’s revenue, an increase of 5.08 percentage points year-on-year, and the proportion of cloud revenue continued to increase.
The company’s digital construction business has a good momentum of development. In 2021, the company’s digital construction business realized a revenue of 1.206 billion yuan, a year-on-year increase of 27.82%; The amount of newly signed contracts has increased rapidly and achieved rapid growth. 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. Seizing the opportunity of digital transformation of construction enterprise customers, the company made use of the first half of the year to give priority to expanding contracts and expanding increments, and focused on the implementation of the strategy of ensuring income and payment collection in the second half of the year, realizing the large-scale expansion of business. Among the newly signed contracts in the whole year, the enterprise and project enterprise integrated solution contracts accounted for about 15%, and a rapid breakthrough was achieved in the head customers; Project level BIM + smart site contracts account for about 85%, among which the large-scale procurement mode of project level single product group has been rapidly promoted, and more than half of labor and bill of materials product contracts come from large-scale procurement. Compared with the same period of last year, the construction business of the company has resumed rapid growth and has a good development momentum. Considering the market space of informatization in the construction stage, we are optimistic about the great development potential of construction business in the future.
Profit forecast and investment suggestions: according to the company’s 2021 annual report, we adjusted the performance forecast and estimated that the net profit attributable to the parent company from 2022 to 2024 would be 1.007 billion yuan (the previous value was 971 million yuan), 1.319 billion yuan (the previous value was 1.285 billion yuan), 1.653 billion yuan (New), and EPS would be 0.85 yuan, 1.11 yuan and 1.39 yuan respectively. The PE corresponding to the closing price on March 28 would be 56.3, 43.0 and 34.3 times respectively. The company’s digital cost business cloud transformation covers the whole country, the cost business cloud transformation has achieved remarkable results, and the future development potential of construction business is huge. The company has actively expanded its design business. In October 2021, the company officially released the digital architectural design product (stand-alone public beta version) based on Glodon Company Limited(002410) independent graphics platform in the field of housing construction. By the end of 2021, the installed capacity of public beta versions of digital architectural design products had exceeded 1700. The layout of the company’s digital construction industry chain has been continuously improved, and the leading position in the industry has been continuously strengthened. We are firmly optimistic about the future development of the company and maintain the “strongly recommended” rating.
Risk tips: (1) the development of cost business does not meet expectations. At present, the company’s cost business cloud transformation covers the whole country. In the future, the development of cost business needs to launch more new cost cloud products. If the company cannot launch new cost cloud products with high customer acceptance in time, there will be a risk that the development of cost business will not meet expectations. (2) The development of construction business did not meet expectations. The company’s BIM products are in a leading position in the market, but if the company cannot continue to maintain the leading position of BIM products and technology in the future, there will be a risk that the development of the company’s construction business will not meet the expectations. (3) The development of design business did not meet expectations. In October 2021, the company officially released the digital architectural design products based on Glodon Company Limited(002410) independent graphics platform (stand-alone public beta version) in the field of housing construction, and accelerated the research and development of structure, electromechanical, component and collaborative products. If the user acceptance of these products is lower than expected, there will be a risk that the company’s design business will not develop as expected.
