\u3000\u3 China Vanke Co.Ltd(000002) 230 Iflytek Co.Ltd(002230) )
Event overview
Iflytek Co.Ltd(002230) released the annual report of 2021 and the first quarterly report of 2022 on April 21. In 2021, the company achieved an operating revenue of 18.314 billion yuan, a year-on-year increase of 40.61%, a net profit attributable to the parent company of 1.556 billion yuan, a year-on-year increase of 14.13%, deducting 979 million yuan of non attributable net profit, a year-on-year increase of 27.54%. In 2022q1, the company achieved an operating revenue of 3.506 billion yuan, a year-on-year increase of 40.17%, a net profit attributable to the parent company of 111 million yuan, a year-on-year decrease of 20.57%, and a net profit not attributable to the parent company of 146 million yuan, a year-on-year increase of 37.73%.
Revenue continued to increase, short-term profits were under pressure, and the long-term dividend release trend was not changed
On the revenue side, the company achieved an operating revenue of 18.3 billion yuan in 2021, a year-on-year increase of 41%, and made breakthroughs in many businesses. Specifically: 1) education is the main source of the company’s revenue. In 2021, the revenue will reach 6.23 billion yuan, a year-on-year increase of 49%; 2) Open platform and consumer business grew the fastest, with an operating revenue of 6.08 billion yuan in 2021, accounting for 33.2% of the total revenue from 23.7% in 2020, a year-on-year increase of 9.5pct, mainly due to the rapid growth of open platform marketing and mobile Internet products and services. On the profit side, in 2021, the company realized a net profit attributable to the parent company of RMB 1.556 billion, with a year-on-year increase of 14%; The comprehensive gross profit margin was 41%, down 4pct year-on-year. The main reasons are as follows: 1) the company’s product structure has changed, and the proportion of information engineering business and hardware products with low gross profit margin has increased rapidly; 2) The company is actively exploring smart medical and other business markets and increasing investment; 3) Affected by the industry, the gross profit of advertising business in the open platform has decreased greatly.
The education track has developed rapidly, and GBC synergy has achieved initial results
The company’s education business has developed rapidly. In 2020 and 2021, the company achieved an operating revenue of 4.19/6.23 billion yuan respectively, with a growth rate of 68% / 49% respectively. 2g2b2c has made positive progress. 1) 2G: the solution of teaching students according to their aptitude has been implemented continuously. At present, it has been implemented in 20 cities and districts and achieved results. 2) 2B: the layered homework to improve learning efficiency and help the implementation of “double reduction” has served more than 8000 schools, about 120000 teachers and nearly 4 million students. 3) 2c: the number of schools operating personalized learning manuals increased by 50%, the scale of users increased by 40% year-on-year, and the renewal rate increased from 75% to 90%; Learning machine sales increased by 150%, and JD tmall Gmv and sales increased by 200% year-on-year. We believe that the company’s products are highly in line with the policy guidelines, and the projects that have been implemented and their large-scale verification results can speed up the business promotion; On the other hand, with the gradual deepening of GBC collaboration, relevant projects are expected to be implemented more widely and faster.
Achieve high growth in multi business, and the “2030 plan” aims at the long term
Medical track: in 2021, the company’s intelligent medical assistant has covered 28 provinces across the country, serving more than 50000 grass-roots doctors and 100 million residents. We believe that the smart medical market has great potential. Through the auxiliary diagnosis system of grass-roots hospitals, the company has laid a good market foundation and is expected to accelerate its development in the later stage. Smart car track: in 2021, the company reached more than 40 cooperative car enterprises, with more than 10 million active users per month. In the future, with the maturity of the company in the technical fields of smart car voice, interaction and sound effect and the implementation of in-depth cooperation with more vehicle manufacturers, the growth of automobile business will be more certain. In the long run, at the beginning of 2022, the company put forward the “iFLYTEK Super Brain 2030 plan”, which aims to make the perception ability of machines surpass that of humans, deeply understand the professional knowledge in the field and have the ability of continuous independent evolution. We believe that the 2030 plan has built the company’s long-term grand goal. At the same time, the AI products and capabilities that the company has implemented also reflect the foundation of the company’s goal.
Investment advice
At present, the company is in the stage of artificial intelligence strategy 2.0, and gradually forms a closed loop of “data algorithm product”. It is expected to get rid of the business model dominated by project system and customization and turn to 2B and 2C two wheel drive to realize the large-scale commercial application of artificial intelligence technology. We expect the company to achieve revenue of 24.2/316/41.3 billion yuan from 2022 to 2024, with a year-on-year increase of 32% / 31% / 31%; The net profit attributable to the parent company was RMB 210 / 290 / 380 million, with a year-on-year increase of 38% / 37% / 29%, maintaining the “buy” rating.
Risk tips
1) the epidemic spread outside China, the business activities of enterprises are limited, and the order demand is less than expected;
2) the government’s investment in education, medical treatment and other fields is less than expected;
3) consumer product recognition and promotion effect are not as expected;
4) industrial competition intensifies and the company’s first mover advantage gradually weakens.
