\u3000\u3 China Vanke Co.Ltd(000002) 230 Iflytek Co.Ltd(002230) )
Matters:
The company announced in its 2021 annual report that in 2021, it realized an operating revenue of 18.314 billion yuan, a year-on-year increase of 40.61%, and a net profit attributable to the parent company of 1.556 billion yuan, a year-on-year increase of 14.13%. The profit distribution plan for 2021 is: it is proposed to allocate 1 yuan (including tax) for every 10 shares, and the capital reserve will not be converted into share capital. The company also announced that in the first quarter of 2022, the operating revenue in the first quarter of 2022 was 3.506 billion yuan, a year-on-year increase of 40.17%, and the net profit attributable to the parent company was 111 million yuan, a year-on-year decrease of 20.57%, and EPS was 0.05 yuan.
Ping An View:
The company’s revenue increased rapidly in 2021, and the net profit attributable to the parent company increased steadily. In 2021, the company’s operating revenue was 18.314 billion yuan, a year-on-year increase of 40.61%, and its revenue achieved rapid growth. Among them, the company’s business income in the field of education was 6.232 billion yuan, a year-on-year increase of 48.85%; The smart city business realized a revenue of 4.974 billion yuan, a year-on-year increase of 29.62%; The revenue of open platform and consumer business was 4.687 billion yuan, a year-on-year increase of 52.19%; The business income of operators was 1.393 billion yuan, a year-on-year increase of 26.79%; The revenue of smart car business was 449 million yuan, a year-on-year increase of 38.92%; The business income of smart hospital was 338 million yuan, a year-on-year increase of 8.06%; The revenue of smart finance business was 197 million yuan, a year-on-year increase of 33.82%. The net profit attributable to the parent company was 1.556 billion yuan, with a year-on-year increase of 14.13%, and the net profit attributable to the parent company achieved steady growth. The growth rate of net profit attributable to the parent company is lower than that of revenue, which is mainly affected by the year-on-year decline of the company’s gross profit margin and other factors. In the first quarter of 2022, the company’s operating revenue was 3.506 billion yuan, with a year-on-year increase of 40.17%, and the revenue continued to grow at a high speed. The net profit attributable to the parent company was 111 million yuan, a year-on-year decrease of 20.57%, mainly because the profit and loss recognized from the change of fair value of the company was – 154 million yuan. Excluding the impact of non recurring profits and losses, the company’s net profit deducted from non parent company was 146 million yuan, with a significant year-on-year increase of 37.73%.
In 2021, the gross profit margin and period expense rate of the company decreased year-on-year, and the R & D investment continued to increase. In 2021, the gross profit margin of the company was 41.13%, a year-on-year decrease of 3.99 percentage points, mainly because the gross profit margin of educational products and services, development platform, information engineering and other businesses decreased year-on-year. The company’s expense rate during the period was 36.12%, a year-on-year decrease of 3.56 percentage points, indicating that the company’s expense control effect was good. The company always puts R & D at a strategic height, adheres to market-oriented, constantly improves core technology, develops new products, upgrades product structure, and comprehensively improves the company’s core competitiveness. In 2021, the company continued to increase R & D investment, with the amount of R & D investment reaching 2.936 billion yuan, a year-on-year increase of 21.50%; The revenue of R & D investment accounted for 16.03%, which remained at a high level.
The company’s artificial intelligence source core technology continues to lead the world. The company continues to adhere to the core technological innovation at the source, adhere to the “indomitable spirit”, and let the industry be rooted in the soil of independent innovation. In 2021, the company continued to lead the scientific and technological progress of artificial intelligence, and won 22 first places in 15 languages in the global multilingual speech recognition competition held by NIST; Participate in cityscapes competition for the third time and brush Shanghai New World Co.Ltd(600628) record; Won the first prize of Wu Wenjun’s artificial intelligence science and Technology Progress Award; In 2021, the international oral machine translation evaluation competition won three track titles; Won the first educational cognition challenge held by nips; Won the highest award in China’s intellectual property field – China Patent Gold Award. The company has won 10 international authoritative evaluation champions in the field of artificial intelligence and scientific and technological awards from the first-class society, and continued to innovate in the key core technology field of artificial intelligence. The company’s continuous leadership in the field of core technology at the source of artificial intelligence has laid a solid foundation for the company’s continuous and in-depth application of artificial intelligence technology in education, medical treatment, consumers and other racetracks.
The company’s AI application has achieved remarkable results. Taking smart education and consumer track as an example, in 2021, in the field of smart education, the company’s comprehensive solution of teaching students according to their aptitude continued to be implemented and deepened in nearly 20 cities, districts (counties) such as Jinshui District of Zhengzhou, Wuhan Economic Development Zone, West Coast new area of Qingdao, Dadong District of Shenyang, Changchun City of Jilin Province and Yijiang District of Wuhu City, which has produced many results that can be proved by statistical data. The number of schools operated by the company’s personalized learning manual increased by 50%, the scale of users increased by 40% year-on-year, and the renewal rate increased from 75% to 90%. In the field of open platform and consumer business, iFLYTEK open platform has opened 449 AI capabilities and solutions to the outside world, bringing together 2.93 million developers. It focuses on enabling 18 industries such as finance, agriculture and energy, providing rich intelligent voice and artificial intelligence capabilities and solutions for the industry. AI marketing business based on iFLYTEK’s open platform helped developer partners improve their commercial realization value, and the revenue increased by 55.55% year-on-year; The channel marketing ability of the company has significantly improved, and consumer hardware sales grew 140%, GMV increased by 152%. Jingdong’s Tmall dual platform GMV grew by more than 80%, and the emerging channels such as jitter and voice tiktok grew rapidly, forming a large-scale operation, and became an important support for C terminal sales. In addition, the company also continued to make positive progress in the application of artificial intelligence in the fields of smart medicine, smart city, operators, smart cars, smart finance and so on. The company’s artificial intelligence strategy of “platform + track” is advancing smoothly and continues to lead the company’s growth.
Profit forecast and investment suggestions: according to the company’s 2021 annual report, we adjusted the performance forecast and estimated that the net profit attributable to the parent company from 2022 to 2024 would be 1.915 billion yuan (the previous value was 2.460 billion yuan), 2.449 billion yuan (the previous value was 3.368 billion yuan) and 3.147 billion yuan (New), with EPS of 0.82 yuan, 1.05 yuan and 1.35 yuan respectively, and the PE corresponding to the closing price on April 21 would be 48.1, 37.6 and 29.2 times respectively. The company is a leading enterprise in the field of artificial intelligence in China and an international leading artificial intelligence technology with independent intellectual property rights. At present, as an important part of China’s new infrastructure, artificial intelligence industry is continuing to usher in a more favorable industrial development environment. The company continues to promote the artificial intelligence strategy of “platform + track”, and has achieved remarkable application results in track businesses such as intelligent education, intelligent medical treatment, open platform and consumer business. We are optimistic about the future development of the company’s artificial intelligence business and maintain the “recommended” rating of the company.
Risk tips: (1) competition intensifies the risk. The company takes artificial intelligence technology and application as its core business and as an industrial hotspot. Giants such as bat and many start-ups focus on the layout in this field. The intensification of market competition may affect the company’s performance. (2) Technological progress is less than expected. As a revolutionary frontier emerging technology, the technical level of artificial intelligence is still far from mature. If the technological progress is less than expected, the company’s high R & D investment may cause losses. (3) The commercialization process is slow. In order to generate business value, artificial intelligence technology still needs to rely on appropriate application scenarios. If the landing progress is slow due to low market acceptance or other factors, it will also put pressure on the company’s operation.
