\u3000\u3 China Vanke Co.Ltd(000002) 236 Zhejiang Dahua Technology Co.Ltd(002236) )
Event overview
Zhejiang Dahua Technology Co.Ltd(002236) released the annual report of 2021 and the first quarterly report of 2022 on April 22. In 2021, the company achieved an operating revenue of 32.835 billion yuan, a year-on-year increase of 24.07%; The net profit attributable to the parent company was 3.378 billion yuan, a year-on-year decrease of 13.44%; Net profit deducted from non parent company was RMB 3.103 billion, with a year-on-year increase of 13.47%. The company achieved an operating revenue of 5.848 billion yuan in 2022q1, a year-on-year increase of 14.34%; The net profit attributable to the parent company was 356 million yuan, a year-on-year increase of 2.30%, and the net profit not attributable to the parent company was 346 million yuan, a year-on-year increase of 11.00%.
The revenue performance is in line with expectations, and the company's operating capacity continues to improve
On the revenue side, the company achieved an operating revenue of 32.835 billion yuan in 2021, a year-on-year increase of 24%. In terms of business, traditional smart IOT products accounted for the highest proportion of revenue and maintained stable growth. Innovative businesses such as machine vision and smart + showed a high boom, with a year-on-year increase of 62%; In terms of products, the domestic b-end products grew rapidly, with a year-on-year increase of 28%. The proportion of b-end products reached 45%, which was much higher than that of g-end products, which accounted for 30%. The main reason was that the company's business was gradually transforming to IOT ecology, while the base of SMB and C-end products was small due to the impact of the epidemic in 20 years, and gradually returned to the normal level in 21 years, with a growth rate of 37%. On the profit side, in 2021, the company realized a net profit of RMB 3.1 billion, an increase of 13% at the same time; The comprehensive gross profit margin was 39%, down 4pct year on year. The main reasons are: 1) affected by the epidemic, the cost of key materials increased sharply, resulting in the decline of the company's overall gross profit margin; 2) The company continued to increase its investment in technological innovation and R & D in core areas such as artificial intelligence and machine vision. The R & D cost rate was 13%, and the R & D investment reached 3.5 billion yuan, a year-on-year increase of 15%.
"One system and two platforms" build the R & D system and realize the landing of multi scenario applications based on the software platform
Digitization and intellectualization have become the core driving force of economic development in the digital intelligence era. In order to improve the software development ability, the company has built a technical architecture system of "one system and two platforms". Among them, "IOT digital intelligence middle platform system" is convenient to help enterprises improve quality and efficiency; "City and industry platforms" have comprehensively helped the digital intelligence upgrading of the industry by focusing on the LAAS, PAAS and DAAS layers. At present, they have iterated to the series of "City platform 2.0" and "enterprise platform 3.0". At the same time, the company also provides smart IOT solutions for all walks of life through the "Yunrui" cloud platform. In 2021, "Yunrui" released 200 + new functions, serving 5000 + enterprises and 1 million enterprise personnel. The platform covers all business scenarios such as chain, community and logistics. We believe that accelerating the landing of multi smart scenes is the company's long-term strategic trend, and the landing of scenes can be expanded only by relying on the software platform. Through the R & D architecture of "one system and two platforms", the reuse of core technologies of the project can be realized quickly.
Da Hua think new strategic empowerment, "two horizontal and two vertical" layout to seize new opportunities
In October 2021, the company released a new Dahua think strategy, relying on aiot and IOT digital intelligence platform to build a "two horizontal" technology strategy and form a "two vertical" business strategy for cities and enterprises. Specifically, "two horizontal": alot controls the business in real time through perception, connection and control capabilities; IOT digital intelligence platform drives business innovation through technologies such as big data mining and view intelligence. "Two vertical": the company adapts AI, big data, cloud computing and other technologies to business and enables digital intelligence. By 2021, in the urban field, the company has seen more than 5000 scenes and launched more than 200 solutions; In the enterprise field, the company has seen more than 3000 scenarios and formed 300+ solutions. We believe that the company's release of dahuathink new strategy, on the one hand, makes the company's positioning and focus clearer and broadens the capability boundary; On the other hand, it also means that a large amount of R & D investment in the early stage of the company is expected to realize performance cashing and release dividends.
Investment advice
Facing the development opportunities of digital economy, on the basis of stabilizing the traditional smart IOT business, the company will increase the investment in innovative business and b-end products, and layout the new era of AI through strategic upgrading. It is expected to broaden the new scene of intelligence based on the technology of software development. We expect the company to achieve revenue of 39.1/485/60.7 billion yuan from 2022 to 2024, with a year-on-year increase of 19% / 24% / 25%; The net profit attributable to the parent company was 4.6/58/7.4 billion yuan, with a year-on-year increase of 35% / 27% / 28%, maintaining the "buy" rating.
Risk tips
1) R & D breakthrough is less than expected; 2) Policy support is less than expected; 3) Project delivery was less than expected.
