\u3000\u3 Shengda Resources Co.Ltd(000603) 466 Shanghai Fengyuzhu Culture Technology Co.Ltd(603466) )
The company’s Q1 orders are in line with expectations. According to our first coverage report, we believe that the company’s business in the short term (2-3 years) benefits from the continued strong demand side, and the fundamentals remain excellent. We believe that the development of metauniverse will go through three stages: g-end / b-end large-scale projects and application promotion, BtoC application popularization, C-end application and content popularization. The g-end / b-end project is expected to take the lead in generating large-scale economic benefits. The relevant software, hardware and infrastructure of yuancosmos are in the early stage of development, and the relevant construction costs are high. The g-end / b-end preliminary attempts to embrace new technologies and new business forms, especially the g-end project has a faster landing speed and progress. At present, local governments have successively launched relevant policies to support the development of yuancosmos. The main objectives are: first, the g-end yuancosmos project plays a role of demonstration and guidance, and has low demands for economic returns; second, it can attract large-scale entry of private capital through government investment and promote technological development. Therefore, g-end / b-end large-scale projects are expected to take the lead and generate large new demand.
According to the data of Beijing Qianlima Wangxin Technology Co., Ltd., benefiting from the strong demand side, the amount of successful orders of the company in January and February 2022 increased year-on-year, with the statistical amount of 425 million yuan and 108 million yuan respectively, increasing by 110.5% and 90.1% respectively; Affected by the epidemic, the amount of bid winning orders in March 2022 decreased significantly year-on-year, with a statistical amount of 50.54 million yuan, a decrease of 68.4%. We believe that demand has not disappeared, but has been delayed. In 2021, the bid winning orders of Q1 maintained a high growth rate year-on-year, mainly due to the delay in order demand caused by the epidemic in the same period in 2020. The bid winning orders of Q2 company increased significantly to 651 million yuan in 2020, with a ring increase of 106.6%, significantly higher than the ring growth rate of Q2 in 2019 and 2021. Q2 in 2019 and 2021 increased by 13.4% and 60.4% respectively.
The growth rate of new orders signed by the company is expected to affect the performance of the next year, and the rhythm of revenue confirmation will also be affected by the external environment at the time point of acceptance and opening (such as the epidemic). In 2022, the amount of orders awarded in Q1 will maintain a high growth rate, which is expected to affect the performance in 2023. The bid winning order amount of Q1 in 2021 was 419 million yuan, an increase of 32.9% at the same time. However, due to the epidemic in 2022, the time point of project acceptance and opening was delayed, affecting the time point of revenue recognition. It is expected that the epidemic will affect the first quarterly report in 2022.
Investment advice
The company’s Q1 order performance in 2022 meets the expectations of our first coverage report. The company is a leader in the field of g-end exhibition hall. Its core competence is digital technology, content creative design and its integration ability. In the next three years, it will benefit from the increasing demand for digital creative experience space construction supported by policies, and its fundamentals are expected to remain excellent. At the same time, the company actively iterates and innovates its business model. There is room for performance flexibility in the medium term and has the potential to be upgraded to a platform company in the long term. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 454 million, RMB 570 million and RMB 775 million respectively, with an increase of 32.5%, 25.7% and 35.8% respectively. The corresponding EPS will be RMB 1.08, RMB 1.35 and RMB 1.84 respectively, and the corresponding valuations will be 21.1 times, 16.8 times and 12.4 times respectively. Maintain the “buy” rating.
Risk tips
The development of yuanuniverse industry is less than expected, the policy support is less than expected, the intensity of industry competition is intensified, the newly signed orders of the company are less than expected, the company’s payment collection is less than expected and produces more than expected bad debt losses, and there is a risk of distortion of the analysis conclusion due to the difference between the statistical order amount and the actual order amount.
