\u3000\u3 China Vanke Co.Ltd(000002) 415 Hangzhou Hikvision Digital Technology Co.Ltd(002415) )
Company announcement
On April 15, the company released the annual report of 2021 and the report of the first quarter of 2022.
In 2021, the company achieved an operating revenue of 81.42 billion yuan, an increase of 28.21% year-on-year; The net profit attributable to the parent company was 16.8 billion yuan, a year-on-year increase of 25.51%; The net profit attributable to the parent company after non deduction was 16.444 billion yuan, an increase of 28.42% year-on-year.
In the first quarter of 2022, the company achieved an operating revenue of 16.521 billion yuan, an increase of 18.11% year-on-year; The net profit attributable to the parent company was 2.284 billion yuan, a year-on-year increase of 5.29%; The net profit attributable to the parent company after non deduction was 2.210 billion yuan, an increase of 9.30% year-on-year.
Comments
The performance exceeded market expectations, and the high inventory decision ensured the stability of supply. In 2021, thanks to the company’s continuous promotion in the field of digital transformation and strong supply chain regulation ability, the revenue and net profit increased by 28.21% and 25.51% respectively year-on-year; Q1-Q4 quarterly revenue increased by 48.36%, 34.17%, 22.41% and 20.06% respectively year-on-year; The profitability is stable, and the gross profit margin and net profit margin are 44.33% and 21.51% respectively. In 2022, under the background of repeated epidemic, the company continued to improve the inventory level and alleviate the supply fluctuation caused by supply shortage and upstream price rise through supply chain planning. Therefore, the company still achieved excellent performance in Q1, with Q1 revenue and net profit increasing by 18.11% and 5.29% respectively year-on-year.
The business positioning is “intelligent IOT”, and the integration ability of software and hardware is continuously improved. Based on the 20-year accumulation of subdivided fields, the business field of the company in 2021 is positioned as “aiot of intelligent IOT”. Based on technology and enabled by products, the company is committed to leading the new future of intelligent IOT.
The company pays attention to technological innovation. At present, there are 25400 R & D personnel, an increase of 23.09% year-on-year; In 2021, the R & D investment was 8.252 billion yuan, accounting for 10.13% of revenue. A high proportion of R & D investment promoted the upgrading of software and hardware products. At present, the company covers a full range of electromagnetic spectrum, expands the perception ability of different dimensions, and provides customers with five types of soft and hard products (IOT perception products, it basic products, platform service products, data service products and application service products) based on three types of support technologies (IOT perception technology, artificial intelligence technology and big data technology), And four system capabilities (system design and development, system engineering implementation, system operation and maintenance management and system operation services).
On the hardware side, the company sells more than 30000 product models; On the software side, the company gradually improves the development efficiency based on the perfect unified software architecture. In 2021, the company’s AI open platform continued to upgrade, adding multi-dimensional capabilities, such as voice classification, character recognition, data intelligence, and expanding the development platform capability from vision to multimodality; Online Autonomous Learning to promote the improvement of algorithm accuracy; Online editing platform, which can open low code for complex applications. By the end of 2021, the AI open platform has served more than 8000 enterprise users, generated 50000 models and accumulated 4000 landing projects.
PBG business: deepen digital intelligence base and help urban digital transformation. In 2021, PBG business achieved an operating revenue of 19.161 billion yuan, a year-on-year increase of 19.85%, accounting for 38.15% of the domestic main business revenue and 23.53% of the operating revenue. Thanks to the digital transformation policy of the 14th five year plan, the digital reform of the government has ushered in a broader market. PBG business deepens the ability of digital intelligence base, takes “perception, intelligence and data” as the core, and takes “two pools, three libraries, seven platforms, one screen and one environment” and other basic software and general software as the foundation to broaden the intelligent application of business in smart city, public safety, transportation, urban governance, livelihood services, ecological environmental protection and other fields, and has formed more than 120 industrial software to meet the needs of the industry. In addition, the company has steadily improved its system engineering capability and provided customers with project closed-loop guarantee. By 2021, the company has provided 346 solutions for g-end customers in different scenarios. In the future, PBG business will continue to sink in the fields of rural revitalization, epidemic prevention and control, emergency management, municipal governance, people’s livelihood and elderly care, so as to seize new business development opportunities.
EBG business: accelerate the enterprise digital transformation of thousands of banks and industries. In 2021, EBG business realized an operating revenue of 16.629 billion yuan, a year-on-year increase of 12.94%, accounting for 33.11% of the domestic main business revenue and 20.42% of the operating revenue; The decrease of EBG revenue growth is mainly due to the change of the company’s revenue statistical caliber in 21 years. If the impact of thermal imaging product revenue statistics is not included, the revenue growth of EBG business is similar to that in previous years, about 24%, in line with expectations. In 2021, due to the policy adjustment of China’s real estate, education and other industries, the overall growth of EBG business will be affected to some extent, but the essential needs of machine replacement and enterprise cost reduction and efficiency increase remain unchanged. EBG is scattered downstream and is still expected to create high growth income for the company. In 2021, EBG business will deepen AI engineering capability, improve comprehensive perception, build smart spell application enabling platform based on low code engine and component technology, and provide enterprise level SaaS services based on yunmou platform to promote the digital transformation of the company’s business in digital energy, intelligent manufacturing, intelligent building, education and teaching, financial services, digital village, intelligent medical treatment, intelligent community and other industries. By 2021, yunmou has been applied to more than 40000 office places, 280000 retail stores and Shanghai Pudong Development Bank Co.Ltd(600000) logistics nodes, served 4.16 million community owners and 3.5 million students’ parents, and accessed 2.5 million device terminals.
SMBG business: build the Internet of Pan security industry, and digital supply chain and marketing go hand in hand. In 2021, SMBG business achieved an operating revenue of 13.490 billion yuan, with a year-on-year increase of 46.49%, accounting for 26.86% of the main domestic business revenue and 16.57% of the operating revenue. Based on the two main platforms of Haikang Internet and Haikang cloud business, SMBG provides channel digitization platform, engineering business workbench, small and medium-sized enterprise user service platform and ecological cooperation open platform to grasp the fragmented needs and empower SMB customers. In 2021, SMBG will improve the digital supply chain, open up the transaction channel from the factory to the user, build nearly 10 Haikang honeycomb logistics centers, and improve the supply chain capacity; At the same time, promote digital marketing, build digital stores and complete the role transformation of platform providers.
Innovative business blossoms at multiple points, injecting new impetus into the long-term development of the company. In 2021, the company’s eight innovative businesses achieved a total operating revenue of 12.271 billion yuan, a year-on-year increase of 98.93%, accounting for 15.07% of the operating revenue; The revenue of five innovative businesses has exceeded 1 billion yuan and the net profit is positive. Among them, fluorite / Siasun Robot&Automation Co.Ltd(300024) / thermal imaging / automotive electronics / storage / other businesses contributed 39.48/27.62/22.14/14.32/13.85/5.30 to the revenue respectively, and the revenue accounted for 4.85% / 3.39% / 2.72% / 1.76% / 1.70% / 0.65% of the total revenue respectively. In 2021, the innovative business expanded in their respective fields, the volume of business income increased rapidly, and fluorite and Siasun Robot&Automation Co.Ltd(300024) started the pace of preparing for listing, injecting new vitality into the long-term development of the company. Taking fluorite as an example, by the end of 2021, the number of fluorite cloud connected IOT devices had reached 159 million, and the smart home hardware product system was gradually formed. Taking Siasun Robot&Automation Co.Ltd(300024) as an example, the company released a new generation of AMR architecture platform, formed four hardware product series based on the base, and developed the first generation of low code application development platform.
Overseas business has gradually recovered from the epidemic and promoted the layout of one country and one policy. In 2021, the company’s overseas business realized an operating revenue of 21.985 billion yuan, a year-on-year increase of 24.23%, accounting for 27% of the operating revenue. At present, the impact of the overseas epidemic is gradually alleviated. The company promotes the differentiated layout of one country and one policy overseas, and improves the ability of overseas marketing and supply chain. By 2021, the company has set up 23 regional functional centers, 66 sales branches and service institutions, 3 manufacturing plants and 11 logistics centers overseas, and has conducted business in 155 countries and regions. Expand overseas markets based on the marketing network structure of headquarters region country. Among them, the headquarters side builds business support capacity, the region side builds operation and service system, and the country side deepens the local market according to local conditions.
Investment advice
Based on the company’s continuous in-depth layout in the field of intelligent IOT, the digital transformation opportunities enjoyed in the downstream of multiple business groups, and the multi-point flowering of innovative businesses, we predict that the company’s net profit attributable to the parent company will be 20.148, 24.672 and 30.412 billion yuan from 2022 to 2024, with the corresponding P / E ratio of 18.50, 15.11 and 12.26 times, maintaining the “buy” rating.
Risk tips
The epidemic affects the downstream market demand; Upstream raw material cost fluctuation; The development of new business is not as expected.
