\u3000\u3 China Vanke Co.Ltd(000002) 230 Iflytek Co.Ltd(002230) )
Event: on April 22, 2022, the company released the 2021 annual report and the first quarterly report of 2022. 2021: the company’s revenue was 18.314 billion yuan, a year-on-year increase of 40.61%; The net profit attributable to the parent company was 1.556 billion yuan, a year-on-year increase of 14.13%; The net profit deducted from non parent company was 979 million yuan, with a year-on-year increase of 27.54%. By product, the revenue of educational products and services, open platforms and intelligent hardware was 607 million yuan, 2988 million yuan and 1237 million yuan respectively, with a year-on-year increase of 49.47%, 55.55% and 41.63% respectively. The first quarter of 2022: the company’s revenue was 3.506 billion yuan, a year-on-year increase of 40.17%; The net profit attributable to the parent company was 110 million yuan, a year-on-year decrease of 20.57%, and the net profit not attributable to the parent company was 146 million yuan, a year-on-year increase of 37.73%.
Increase strategic investment and map to short-term pressure on gross profit margin. In 2021, the company’s gross profit margin was 41.13%, down 3.99 percentage points year-on-year. It is mainly due to the decline of gross profit margin due to advanced strategic investment. By product,
1) the revenue in the field of education was 6.007 billion yuan, a year-on-year increase of 49.47%, and the gross profit margin was 51.66%, a year-on-year decrease of 2.59pct. The proportion of main products learning machines is further too large, and its hardware form leads to a decline in gross profit margin; On the premise that the education business has the attribute of public welfare, it is in a balanced development state in the promotion stage. In the coverage process of remote areas + poor counties, corresponding concessions and discounts are given to enhance customers’ reputation and conducive to long-term development.
2) the revenue of open platform business was 2.988 billion yuan, a year-on-year increase of 55.55%, and the gross profit margin was 21.21%, a year-on-year decrease of 2.87pct. In terms of business structure, the authorized revenue of open platform was 520 million, with a year-on-year increase of 65% and the relevant gross profit margin of 87%; The revenue of advertising business is about 2.5 billion, with a year-on-year increase of about 27% and a gross profit margin of 16%. Due to the strong supervision of Internet traffic by the state, the network traffic has decreased, and the gross profit margin of advertising business is under pressure. This year, by increasing the growth of open platforms and adjusting advertising algorithms, the gross profit margin is expected to increase to about 18% – 20%.
3) the total revenue of smart city and political and legal business is 4.973 billion yuan, with a gross profit margin of about 32%. Year on year decrease 6pct. In 2021, the company carried out strategic cooperation with more cities and undertook more information engineering business as a general integration and service provider, resulting in a decline in the overall gross profit margin.
The construction of base areas was accelerated to realize the deep integration of g-b-c. The education track takes the lead in realizing the integration of g-b-c. g end: the education and teaching system is implemented in multiple provinces; End B: the school establishes a simulated examination environment and system; C end: students strengthen their learning cognition and review. Compared with the medical architecture, the three levels of g-b-c are highly coupled: the g-end is dominated by rural health centers and communities directly managed by the Health Commission; The b-end takes hospitals at all levels as the core; The C-terminal is oriented to the majority of family users with chronic disease management and follow-up by family doctors. With the evolving ability of background general practitioners as the core, it is far beyond grass-roots doctors. It is expected to realize the integration of g-b-c in medical treatment and other tracks in the future.
Investment suggestion: as a leading enterprise of artificial intelligence in China, the company has achieved full coverage of AI industry chain in more than 20 years. In the era of artificial intelligence 2.0, the company innovatively put forward the strategic policy of “indomitable” and continued to obtain large orders with “base business”. At the same time, through the scenario application of its own core technology, it took the lead in launching a number of AI technologies and platforms in the industry. It is estimated that the EPS from 2022 to 2024 will be 0.95 yuan, 1.38 yuan and 2.00 yuan respectively, and the current market value corresponding to the PE of 22 / 23 years will be 41x / 28x respectively, maintaining the “recommended” rating.
Risk tip: the landing of new business is less than expected, and the repeated epidemic brings delivery risk.
