\u3000\u3 China Vanke Co.Ltd(000002) 230 Iflytek Co.Ltd(002230) )
Event: on April 21, 2022, the company released the performance express for the whole year of 2021 and 2022q1. In 2021, the company realized an operating revenue of 18.314 billion yuan, an increase of 40.61% and a net profit attributable to the parent company of 1.556 billion yuan, an increase of 14.13% and a deduction of 979 million yuan, an increase of 27.54%; In 2022q1, the operating revenue was 3.506 billion yuan, an increase of 40.17% and the net profit attributable to the parent company was 111 million yuan, a decrease of 20.57% and a deduction of 146 million yuan, an increase of 37.73%. The performance of the whole year of 2021 and the first quarter of 2022 exceeded market expectations.
Education, open platform, C-terminal intelligent hardware, smart car and other businesses grew rapidly, the industry boom continued, and the application scope of AI continued to expand. In 2021, the company’s educational products and services business increased by about 49% year-on-year, the open platform increased by 56%, the intelligent hardware increased by 42% year-on-year, and the smart car increased by 39% year-on-year, showing a high-speed growth trend. Smart city / Finance / medical and other businesses also grew steadily, reflecting the continued high prosperity of AI landing.
Affected by the nature of education and open platform business, the gross profit margin is under pressure in the short term. In 2021, the company’s gross profit margin was 41.43%, down 4 PCT from the same period last year. With the continuous implementation of individualized education business, higher requirements are put forward for process learning data collection. The proportion of hardware in the overall intelligent education scheme has increased, resulting in a decline in the gross profit margin of education business (a decrease of – 2.59 PCT compared with last year); At the same time, the business of open platform is growing rapidly, while the main business model of open platform is advertising, and the gross profit margin of advertising business is low (21.21%). The nature of their business has brought periodic pressure on the company’s gross profit margin. As the company continues to expand the realization mode of open platform, the company’s gross profit margin is expected to recover in the future.
The ability to control fees is stable and excellent. In 2021, the company’s sales / management / financial expense ratio decreased by 1.3/0.56/0.18 PCT respectively, reflecting the company’s stable management ability and profitability.
The real barriers of the company come from semantics and scenes. Behind consumer goods, automobiles, education and medical treatment are semantics and scenes. The AI landing in various vertical fields is expected to grow rapidly in the future. Deep neural network fusion end-to-end technology has greatly improved the accuracy of speech recognition. Technological iteration and innovation have promoted the speech recognition rate to a higher level than human beings. Deepening situational semantic understanding and constructing knowledge map are the key to speech recognition in the future, and also the Iflytek Co.Ltd(002230) real barrier. Consumption: each product has its own scenario and customer demand pain points behind it. The 2021 intelligent hardware business has begun to accelerate, with a year-on-year growth rate of 42%. Medical: Based on the medical depth model, build a knowledge map for reasoning to improve the service capacity and efficiency of grass-roots medical institutions. Justice: through graphic recognition, semantic understanding and judicial element extraction, we will help the reform of the judicial system and the construction of smart courts, and improve the quality, efficiency and credibility of justice. We believe that the continuous deepening of the above vertical industries is expected to accelerate the revenue end of each section in the future.
Maintain the “buy” rating. We expect iFLYTEK’s revenue from 2022 to 2024 will be 24.56/32.49/42.59 billion yuan respectively. Considering the company’s leading position in AI, we maintain the “buy” rating.
Risk warning: the risk of intensified market competition; Risks of backward technology research and development and investment not meeting expectations; The risk of brain drain; The risk that the accounts receivable increase and the customer’s collection does not meet expectations.
