\u3000\u3 China Vanke Co.Ltd(000002) 410 Glodon Company Limited(002410) )
Event: on March 28, 2022, the company released its annual report for 2021. During the reporting period, the company realized an operating revenue of 5.562 billion, a year-on-year increase of 40.92%; The net profit attributable to the parent company was 661 million, with a year-on-year increase of 100.06%; The net profit deducted from non parent company was 651 million, with a year-on-year increase of 115.93%. In terms of business, the revenue of digital cost business reached 3.813 billion, a year-on-year increase of 36.64%; Digital construction business realized a revenue of 1.206 billion, a year-on-year increase of 27.82%; The revenue of digital design business reached 131 million, a year-on-year increase of 250.12%; Overseas business realized a revenue of 153 million, a year-on-year increase of 3.89%.
The performance exceeded expectations, the digital cost and construction developed steadily, and the growth momentum of digital design business was deep. The performance exceeded expectations, which was reflected in the significant improvement of the company’s net profit margin, mainly due to the reduction of expense rate caused by scale effect. In 2021, the company’s sales expenses, management expenses and R & D expenses accounted for 28.4%, 19.56% and 23.73% of the revenue respectively, with a year-on-year decrease of 3.11%, 2.39% and 3.31% respectively, which mainly benefited from the smooth transition of the company to the cloud, high customer recognition and high renewal rate. The optimization of business model has brought about the improvement of scale effect. Digital cost and digital construction business are the main businesses at present. The proportion of revenue in 2021 is 68.56% and 21.67% respectively, and the year-on-year growth in 2021 is 36.64% and 27.82% respectively. The growth is steady. In the future, with the deepening of digitization in the construction industry, relevant businesses are expected to maintain the growth momentum.
The cloud transformation of digital cost business was smooth, and the transformation rate of new transformation regions and the renewal rate of old transformation regions were improved.
After the cost business restored the balance of cloud contract liabilities in 2021, the operating revenue was 4.353 billion yuan, an increase of 27.90% year-on-year. The cloud contract signed during the reporting period was 3.1 billion yuan, an increase of 38.77% year-on-year. The cloud revenue recognized during the reporting period was 2.561 billion yuan, accounting for 67.15% of the cost business revenue. The last four regions of this business, Jiangsu, Zhejiang, Anhui and Fujian, began to enter the comprehensive cloud transformation. For the first time, they realized the positive growth of restored income in the year of transformation. In 2021, the transformation rate of the new transformation region exceeded 60%, and the transformation rate of the new transformation region and the renewal rate of the old transformation region increased simultaneously. In the context of the normalization of the epidemic, the online operation system meets the digital needs and is expected to continuously improve customer satisfaction and internal operation efficiency. In addition, the cloud transformation means the increase of modular and collaborative business value in the future. Under the digital trend of the construction industry, the company is expected to fully benefit from the digital transformation needs of customers
Digital construction business has a large growth space and is expected to continue in large quantities in the future. In 2021, 16000 new projects and 1600 new customers were added to the digital construction business, realizing the large-scale expansion of the business. China’s digital construction business market is huge, and the demand for digital transformation of construction enterprise customers is increasing day by day. The “platform + component” mode is rapidly popularized. The company uses scientific and technological innovation and digital means to improve business efficiency, seize market opportunities, and rapidly increase the amount of newly signed contracts. Looking forward to the future, the digitization of the construction industry is expected to deepen. According to the data of China State Construction Engineering Corporation Limited(601668) Industry Association, China State Construction Engineering Corporation Limited(601668) informatization investment accounts for only 0.08% (1% in European and American developed countries), and the R & D expenditure of large and medium-sized construction enterprises accounts for only 2% (5-10% in the world’s top 500 enterprises). The digitization degree is still low. During the 14th Five Year Plan period, the construction industry clearly put forward the objectives of industrialization, digitization and intelligence, The company’s related businesses are expected to fully benefit from the deepening of digitization in the future.
Integrate Hongye Technology, strengthen digital design business and carry out the layout of the whole industrial chain. With the development of the digital age, the traditional design business is also facing the needs of transformation and upgrading. Based on the independent design platform, the company connects all links of the industrial chain. In 2021, digital design BG was officially established, successfully developed the digital business into a new growth pole, successfully completed the integration with its subsidiary Hongye Technology, and opened up the industrial chain from product to market to channel. The company’s design business includes architectural design, municipal design and digital delivery. Except that digital delivery is self-developed products, bimspace, two-dimensional architectural design in architectural design and civil municipal design in municipal design are based on the integration and R & D of Hongye products. The synergy between the company and its subsidiary Hongye Technology business is significant. The company’s layout upstream of the industrial chain can, on the one hand, penetrate its accumulation in the construction industry upstream to form an integrated design platform. On the other hand, the connection of the whole industrial chain data is conducive to providing customers with architectural design solutions integrating full professional design and construction cost, and is conducive to customers improving quality and efficiency through digital solutions of the whole industrial chain.
Profit forecast and investment rating of the company: the growth of the company’s main business is stable and optimistic about the development trend of the company under the digital transformation trend of the construction industry. We expect the net profit of the company from 2022 to 2023 to be 950 million yuan, 1270 million yuan and 1617 million yuan respectively, corresponding to EPS of 0.80, 1.07 and 1.36 yuan respectively. The corresponding share prices of 202612023 are 46 times and 36 times respectively. Maintain a “recommended” rating.
Risk tip: the prosperity of the construction industry is at a downward risk, the digital transformation of the construction industry is less than the expected risk, and the relevant business expansion of the company is less than the expected risk.
