\u3000\u3 China Vanke Co.Ltd(000002) 230 Iflytek Co.Ltd(002230) )
Investment Event: on April 21, the company released the 2021 annual report and the performance report for the first quarter of 2022. In 2021, the company realized a 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%, and a net profit deducted from non attributable to the parent company of 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%, a net profit attributable to the parent of 111 million yuan, a year-on-year decrease of 20.57%, and a deduction of non attributable net profit of 146 million yuan, a year-on-year increase of 37.73%.
The education business maintained a high growth rate and the g / B / C-end linkage and coordinated growth: in 2021, the company continued to optimize the business structure and build a g / B / C-end customer business system for the education business. In terms of g-end, in 2021, the company’s individualized teaching program will be implemented and deepened in nearly 20 cities, districts and counties such as Zhengzhou Economic Development Zone, and the English listening and speaking test will add 4 provincial college entrance exams and 29 Prefecture and city high school entrance exams; The b-end business benefited from the implementation of the “double reduction” policy, and the market space around the school scene was opened. In 2021, the company’s layered operation has served more than 8000 schools, and the after-school operation service has also covered more than 170 districts and counties; C-end volumes maintained a high growth rate. In 2021, users increased by 40%, and the renewal rate increased from 75% to 90%. The annual sales of learning machine products increased by 150% under the guidance of the new generation T10 learning machine. On the whole, the company’s education business has achieved important breakthroughs at the g / B / C end, and the synergistic promotion effect of the three lines of g / B / C has been significantly enhanced. The company’s education business is expected to maintain high growth.
Smart medical has opened a wide layout, and the short-term rhythm has not changed the long-term high growth trend: in 2021, the company’s smart medical business revenue was 338 million yuan, a year-on-year increase of 8.06%. In 2021, the national level successively issued the opinions on comprehensively promoting rural revitalization and accelerating agricultural and rural modernization, the 14th five year plan and the outline of long-term objectives in 2035, all of which emphasized the importance and necessity of medical and health services sinking to a wider grass-roots level. The company increased the R & D and exploration of the application of artificial intelligence technology in the medical field, and accelerated the nationwide layout. The general practitioner assistants widely covered 28 provinces (autonomous regions and municipalities directly under the central government) and 284 districts and counties in China, and realized the normal application. At the same time, the company’s medical core technology effectively improves the epidemic prevention level and public health service level of relevant grass-roots government institutions, and realizes product innovation and application in the fields of medical insurance cost control, chronic disease management and so on. Affected by the epidemic and other factors, the implementation rhythm of some medical projects of the company was delayed in 2021, which had a certain impact on the revenue of the company’s medical business. In 2021, the revenue of the company’s medical business was 338 million yuan, with a year-on-year increase of 8.06%, which was lower than expected. However, with the normalization of the situation in China, the artificial intelligence enabled grass-roots public health is still a long-term high growth track, and the subsequent medical business of the company will continue to release its performance rapidly.
Increasing investment layout in the future, the short-term financial performance may continue to be under pressure: in 2021, the company’s financial performance was under pressure, the gross profit margin was 41.13%, the year-on-year decrease was 2.99pct, the net profit attributable to the parent was 8.50%, the year-on-year decrease was 1.97pct, and the net operating cash flow was 893 million yuan, a year-on-year decrease of 60.67%, which was mainly due to the company’s increasing investment in production and research and ensuring the supply and preparation of goods. In 2021, the company’s personnel scale increased by 3301, including more than 1900 R & D personnel; At the same time, in order to ensure the adequacy of product chips, the company invested a lot of funds for chip guarantee in the current period, and paid a large number of bills that should be cashed in the early stage. At the beginning of 2022, the company officially launched the “iFLYTEK Super Brain 2030 plan”, which enables Siasun Robot&Automation Co.Ltd(300024) into every family through three stages. Rooted in the core technology of artificial intelligence, the company adheres to the core development logic and engine of “base business” + “systematic innovation”. Therefore, the company will continue to invest at a high level, and its financial performance may be under pressure in the short term. However, in the long term, the company’s investment will achieve output and return in many years, and the company’s competitive barriers will be continuously consolidated under the high investment.
Profit forecast and investment suggestions: the company’s base business continues to cash dividends, and emerging tracks such as medical treatment are expected to maintain high growth prospects. As a leading AI company in China, the company is expected to fully benefit from the development trend of deepening the implementation of AI technology. However, the long-term development needs to be supported by the basic investment in the early stage. The increase of R & D and personnel investment in the medium and short term will suppress the company’s profits to a certain extent. Based on the above, we adjust the forecasts for 2022 and 2023 and add a new forecast for 2024. It is estimated that the total revenue of the company from 2022 to 2024 will be 24385 / 320.32/41.036 billion yuan respectively (the value before 20222023 will be 22437 / 29.168 billion yuan), the net profit attributable to the parent company will be 2137 / 2903 / 3898 million yuan respectively (the value before 20222023 will be 2438 / 32.13 billion yuan), and the EPS will be 0.92/1.25/1.68 yuan respectively, corresponding to 42 / 31 / 23 times of PE, maintaining the “buy” rating.
Risk tip: AI business is not progressing as expected; Intensified market competition; Increase in accounts receivable, customers’ collection is less than expected, etc.
