\u3000\u3 China Vanke Co.Ltd(000002) 410 Glodon Company Limited(002410) )
Event: on March 28, the company released its 2021 annual report. The annual revenue was 5.619 billion yuan, a year-on-year increase of 40.32%, and the net profit attributable to the parent company was 661 million yuan, a year-on-year increase of 100.06%. At the end of the period, the balance of contract liabilities related to cloud transformation was RMB 2.047 billion. After restoring the cloud contract liabilities, the company’s revenue was RMB 6.156 billion, with a year-on-year increase of 33.21%, and the net profit attributable to the parent was RMB 1.144 billion, with a year-on-year increase of 29.19%.
The company’s revenue increased rapidly, and the net profit attributable to the parent doubled. The performance growth was mainly due to the cost and construction business. The digital cost revenue was 3.813 billion yuan, a year-on-year increase of 36.64%, and the digital construction revenue was 1.206 billion yuan, a year-on-year increase of 27.82%. 1) Digital cost: cloud contracts continue to grow at a high rate, and the proportion of cloud revenue in cost revenue continues to increase. In the whole year, the signed cloud contract was RMB 3.1 billion, with a year-on-year increase of 38.77%, and the recognized cloud revenue was RMB 2.561 billion, accounting for 67.15% of the cost revenue. The cloud conversion rate in the new transformation region and the cloud renewal rate in the old transformation region have both increased. By the end of 2021, the conversion rate and renewal rate in the transformation region in 2019 were more than 85% / 90% (80% / 88% at the end of 2020), the conversion rate and renewal rate in the transformation region in 2020 were more than 80% / 85% (50% at the end of 2020), and the conversion rate in the new transformation region exceeded 60% in 2021, which further improved the conversion rate. 2) Digital construction: 16000 new projects were added throughout the year, and the newly signed contract amount was rapid and large-scale. Among the project level BIM + smart site contracts, more than half of the labor and bill of materials product contracts came from large-scale procurement. 3) Digital design: breakthroughs have been made in independent digital architectural design products. By the end of 2021, the installed capacity of public beta versions of digital architectural design products had exceeded 1700. 4) Innovative business: the expansion from technology to products and solutions is realized on the CIM platform. 5) Overseas business: Digital cost cubicost is promoted on a large scale in key regions in Southeast Asia, and digital construction magicad continues to operate in depth in the advantageous market in northern Europe.
Continuous R & D investment has made breakthroughs in key areas such as graphics, AI and industry open platforms. In 2021, the total R & D investment was 1.626 billion yuan, accounting for 29.23% of the revenue, with a year-on-year increase of 21.41%. The graphics engine continues to improve to support the release of digital design products. AI dialogue technology has been applied to the automatic filling of construction safety hazards; AI conceptual design platform is preliminarily formed. BIM + GIS platform was successfully launched, and CIM engine was initially formed.
The equity incentive plan maintains the stability and enthusiasm of core talents. In the third quarter of 2021, the company launched the equity incentive plan and granted 5440900 restricted shares for the first time to 345 people including directors, senior managers, core managers and core technology (business) backbones, with the grant price of 30.48 yuan / share. The performance assessment target is that the net profit in 21-23 years shall not be less than RMB 650 / 9.5 / 1.25 billion respectively.
Investment suggestion: be optimistic about the company’s cloud transformation business and grow into a leading enterprise of digital building platform service provider. Raise the revenue forecast for 22-23 years to RMB 6.816/8.192 billion, which is + 10.8% / + 8.8% compared with the previous forecast, and increase the revenue forecast for 24 years to RMB 9.849 billion; The forecast of net profit attributable to the parent company for 22-23 years was raised to 970 / 1298 million yuan, which was + 4.0% / + 2.1% compared with the previous forecast, and the forecast of net profit attributable to the parent company for 24 years was increased to 1.654 billion yuan. The corresponding EPS of 22-24 years is 0.81/1.09/1.39 yuan respectively, and the corresponding PE is 58x / 44x / 34x, maintaining the “overweight” rating.
Risk tip: the cost cloud transformation is less than expected, and the signing of digital construction contract is less than expected.
