\u3000\u3 China Vanke Co.Ltd(000002) 230 Iflytek Co.Ltd(002230) )
The company disclosed the operation in 2021 and 2022 Q1. In 2021, the company achieved a revenue of 18.314 billion yuan (+ 40.61%), a net profit attributable to the parent company of 1.556 billion yuan (+ 14.13%), and a deduction of 979 million yuan (+ 27.54%). In 2022 Q1, the company achieved a revenue of 3.506 billion yuan (+ 40.18%), a net profit attributable to the parent company of 110 million yuan (- 21.34%), and deducted a non net profit of 145 million yuan (+ 36.71%), maintaining the buy rating.
Key points supporting rating
The “base business” continues to expand and the annual income increases rapidly. In 2021, the application scale of the company’s “base business” continued to expand, accounting for more than 50% of the total revenue. As of December 31, 2021, the number of developers gathered on iFLYTEK’s open platform has reached 2.93 million, and the number of platform applications has exceeded 1.37 million. The rapid expansion of “base area business” led to the rapid growth of the company’s overall performance, and the company achieved a revenue of more than 18.3 billion yuan (+ 40.61%).
Increased strategic investment and steady profit growth. In 2021, the company continued to increase R & D investment, with total R & D expenses of 2.839 billion yuan (+ 28.43%), total sales expenses of 2.686 billion yuan (+ 28.9%), and an increase of 3301 personnel reserves. With the increase of strategic investment, the net profit of the company reached 1.556 billion yuan (+ 14.13%), and the deducted non net profit reached 979 million yuan (+ 27.54%), realizing rapid growth.
Q1 revenue growth is not reduced, and the deduction of non net profit is good. In Q1 2022, the company’s revenue maintained a rapid growth, and the net profit attributable to the parent decreased by 21.34% year-on-year, mainly due to Cambricon Technologies Corporation Limited(688256) , Three’S Company Media Group Co.Ltd(605168) and other changes in fair value due to changes in share price. After excluding the impact of this factor, the deduction of non net profit reached 145 million yuan (+ 36.71%), and the overall business development trend was good.
Valuation
It is estimated that the net profit from 2021 to 2023 will be 1.556, 1.858 and 2.297 billion yuan, EPS will be 0.67, 0.80 and 0.99 yuan (revised down by 4% ~ 23% considering the factors of increased investment and non recurring profit and loss), and the corresponding PE will be 64x, 53x and 43x, maintaining the buy rating.
Main risks of rating
The growth rate of “base business” is lower than expected; Technology research and development is not as expected; Cost control is less than expected.
