This week’s view:
I. the industry fell sharply due to external disturbance. It is suggested to pay attention to the high-profile segments
Since the beginning of the year, A-Shares have continued to decline, with the cumulative decline of the CSI 300 index of 18.77% and the gem index of 30.88%. The computer sector also performed poorly, with a cumulative decline of 28.51%. We believe that changes in the international situation have accelerated the switching of market style, superimposed on factors such as repeated outbreaks and the Fed’s interest rate hike. At present, the market’s preference for growth stocks continues to decline, and the decline of computer 22q1 has become the third largest decline after the 15 year stock disaster.
Taking history as a mirror, through the resumption of the market trend of the computer industry and subdivided sectors, we judge that this round of sharp decline is mainly caused by the external environment. Subdivided industries such as financial technology and intelligent driving continue to have a high outlook. Once the market style changes, it is expected to take the lead in rebounding. In terms of individual stocks, Hundsun Technologies Inc(600570) , Thunder Software Technology Co.Ltd(300496) , Iflytek Co.Ltd(002230) , Beijing Kingsoft Office Software Inc(688111) all fall in the form of killing valuation, and it is judged that the rebound probability is the greatest.
II. Iflytek Co.Ltd(002230) : Education + consumer two wheel drive, AI leader enters the dividend cashing period
The company issued the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 18.314 billion yuan, with a year-on-year increase of 40.61%. So far, iFLYTEK has become the only company with an average annual compound growth rate of more than 25% in A-Shares in recent 10 years. The net profit attributable to the parent company was 1.556 billion yuan, a year-on-year increase of 14.13%; The non net profit deducted was 979 million yuan, a year-on-year increase of 27.54%.
In the first quarter of 2022, the company achieved a revenue of 3.506 billion yuan, a year-on-year increase of 40.17%; The net profit attributable to the parent company was 111 million yuan, a year-on-year decrease of 20.57%, which was mainly due to the company’s share holding and the recognized profit and loss of – 154 million yuan due to the fluctuation of share price. The non net profit deducted was 146 million yuan, a year-on-year increase of 37.73%, and the profitability of the company continued to increase. In 2021, the company’s revenue slightly exceeded our expectations, mainly due to the rapid growth of the company’s education business and consumer business, and the steady growth of smart city business. In terms of education business, the 2B area individualized education program accelerates the replication in different places, and 2C personalized learning manual + learning machine continues to make efforts. With the continuous deepening of off-campus teaching and training supervision, the core position of on-campus education will be further highlighted. The dragon head of AI Education Iflytek Co.Ltd(002230) which focuses on the on-campus system and spans online and offline will be the biggest beneficiary, and the main logic of the rapid expansion of the company’s education business is expected to continue. Both open platforms and consumer businesses have achieved rapid growth. The continuous growth of 2C hardware products fully shows the synchronous improvement of the company’s product-oriented ability and large-scale promotion ability, and the new growth curve of 2C can be expected.
In addition, the company’s expense rate has improved during the period, highlighting the scale effect, high R & D investment continues to consolidate barriers, cash flow confirms the high boom, AI solutions are implemented in multiple scenarios, and the business in the base area can be expected in the future.
III. investment suggestions: focus on Beijing Compass Technology Development Co.Ltd(300803) & Navinfo Co.Ltd(002405) & Thunder Software Technology Co.Ltd(300496) & Huizhou Desay Sv Automotive Co.Ltd(002920)
1) Beijing Compass Technology Development Co.Ltd(300803) : it is expected to replicate the development path of China stock market news and usher in exponential growth. In 2022q1, the company achieved a revenue of 623 million yuan, a year-on-year increase of 89.51%; The net profit attributable to the parent company was 267 million yuan, a year-on-year increase of 176.5%, with outstanding growth. The company’s financial service business has entered the fast lane of development.
2) Navinfo Co.Ltd(002405) : high precision map + chip + data compliance multi driver. As a high-precision map “national team”, it is expected to leverage the penetration of high-precision map business with data compliance business and extend to the upper level of automatic driving based on map data.
3) Thunder Software Technology Co.Ltd(300496) : release Qualcomm 8295 intelligent cockpit solution, and intelligent driving opens the second growth curve. On the one hand, it maintains the card position advantage formed by cooperation with Qualcomm, on the other hand, it sets up a new company to show its determination to enter automatic driving.
Investment advice
Reiterate that we are firmly optimistic about the leading companies with card advantages in cloud computing SaaS, energy it, financial technology, intelligent driving, artificial intelligence and other prosperous tracks, and actively recommend the following seven investment lines: 1. Cloud computing SaaS: focus on recommending enterprise SaaS leader Yonyou Network Technology Co.Ltd(600588) , office software leader Beijing Kingsoft Office Software Inc(688111) (joint coverage with small and medium-sized markets), and super Integration Leader Sangfor Technologies Inc(300454) . 2. New energy it: focus on recommending energy SaaS leader Longshine Technology Group Co.Ltd(300682) (joint coverage of communication group), distribution network dispatching pioneer Dongfang Electronics Co.Ltd(000682) , domestic energy BIM software leader Beijing Forever Technology Co.Ltd(300365) . 3. Fintech: securities it Hundsun Technologies Inc(600570) , financial information service provider Beijing Compass Technology Development Co.Ltd(300803) , in addition, Yusys Technologies Co.Ltd(300674) , Shenzhen Sunline Tech Co.Ltd(300348) , Hithink Royalflush Information Network Co.Ltd(300033) , are recommended to welcome the upswing of the economy. 4. Intelligent driving: the vehicle OS leader Thunder Software Technology Co.Ltd(300496) , the intelligent cockpit leader Huizhou Desay Sv Automotive Co.Ltd(002920) (joint coverage of vehicle groups) and the high-precision map leader Navinfo Co.Ltd(002405) are recommended as the key benefit targets. 5. Artificial intelligence: recommend intelligent voice faucet Iflytek Co.Ltd(002230) . 6. Network security: focus on recommending emerging security double leaders Qi An Xin Technology Group Inc(688561) + Sangfor Technologies Inc(300454) , Dbappsecurity Co.Ltd(688023) as a subdivided emerging security leader, which will also benefit deeply. Other beneficiaries include: Venustech Group Inc(002439) , Xiamen Meiya Pico Information Co.Ltd(300188) , etc. 7. Xinchuang: domestic WPS leading manufacturer Beijing Kingsoft Office Software Inc(688111) (jointly covered with small and medium-sized disk groups), domestic middleware leading Beijing Tongtech Co.Ltd(300379) , domestic PDF leading Fujian Foxit Software Development Joint Stock Co.Ltd(688095) , domestic server leading Dawning Information Industry Co.Ltd(603019) .
Risk tips
Market systemic risks, the landing of scientific and technological innovation policies is less than expected, and the game between China and the United States is an emergency.
