\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 87 Guangzhou Sie Consulting Co.Ltd(300687) )
Event: the company released its 2021 annual report, realizing an operating revenue of 1.935 billion yuan, a year-on-year increase of 39.68%; The net profit attributable to the parent company was 225 million yuan, a year-on-year increase of 27.53%; Net profit after deduction of non return to parent was 208 million yuan, with a year-on-year increase of 27.84%. The performance is in line with expectations.
Fully benefited from the general trend of upgrading China’s manufacturing industry, the performance maintained a rapid upward trend. 1) During the reporting period, the company continued to improve the production capacity of industrial software and digital middle platform, continued to implement the strategy of regional expansion and market leadership, strengthened the cooperation of ecological partners, continuously connected external resources and enhanced customer stickiness, maintained good growth, achieved an annual operating revenue of 1.935 billion yuan, a year-on-year increase of 39.68%, and the overall gross profit margin reached 35.33%, a year-on-year increase of 0.43 PCT. In terms of profit, the company realized a net profit attributable to the parent company of 225 million yuan, with a year-on-year increase of 27.53%. If the impact of share based payment expenses of about 36.84 million yuan is deducted, the growth rate will reach 45.6%, maintaining a rapid upward trend. 2) In terms of business, in 2021, the company’s Pan ERP business revenue was 1.118 billion yuan, a year-on-year increase of 37.07%, and the gross profit margin was 35.11%, a year-on-year increase of 0.99pct; The revenue of intelligent manufacturing business was 592 million yuan, with a year-on-year increase of 43.23%, and the gross profit margin was 42.12%, with a year-on-year increase of 1.08 PCT. The synergy between Pan ERP business and industrial software implementation business is obvious. The full stack product portfolio ability has begun to be recognized by the market. New orders signed in the whole year exceeded 2.5 billion yuan, with a year-on-year increase of about 39%, serving more than 800 customers. At the same time, the development of self-developed products has accelerated, which is expected to continuously improve profitability and the sustainability of subsequent performance is expected.
The R & D strength was further improved, and the overall cost rate remained stable. 1) In 2021, the company’s R & D investment was 296 million yuan, with a year-on-year increase of 76.49%, accounting for 15.32% of revenue, with a year-on-year increase of 3.20 PCT, and the R & D capital strength was further improved by the end of 2021. In 2021, the number of R & D personnel was 2492, with a year-on-year increase of 49.76%, accounting for 40.43% of the total employees. 13 invention patents and 106 software copyrights were added, further improving the core technology advantages. 2) The overall expense rate remained stable, including the sales expense rate of 5.32%, a year-on-year increase of 0.05pct, the management expense rate of 6.73%, a year-on-year increase of 1.39pct, the R & D expense rate of 10.27%, a year-on-year increase of 0.65pct, the financial expense rate of 0.95%, and a year-on-year increase of 0.32pct.
The penetration rate of industrial Internet applications is expected to increase significantly, and the increase in the proportion of software drives profitability. 1) On January 12, 2022, the State Council issued a notice on the 14th five year plan for digital economy development. It is disclosed in the plan that in 2020, the added value of China’s core industries of digital economy will account for 7.8% of China’s gross domestic product (GDP). By 2025, the digital economy will move towards a period of comprehensive expansion, and the added value of core industries of digital economy will account for 10% of GDP. Among them, the application penetration rate of industrial Internet platform is planned to increase from 14.7% to 45%, and the penetration rate will increase significantly. 2) The revenue growth of the company’s intelligent manufacturing and industrial Internet of things business is expected to exceed the overall average, and the proportion of revenue will further increase, becoming the main contribution to revenue growth. The s-mom manufacturing and operation kit provided by the company for the market has formed a business model of “standard platform + industry Kit + configured service” on the basis of open platform. Historically, the company has focused on customer expansion in high-profile industries, and has continued to cultivate in PCB semiconductor, Pan home, communication electronics and related parts and components industries. At present, large head manufacturing enterprises usually have the nature of multiple locations and multiple factories. The first project usually starts with a single factory and replicates with multi factory promotion. Therefore, standardized products such as s-mom are expected to accelerate the promotion and drive the continuous growth of the business.
As Huawei’s top strategic partner, jointly promote intelligent manufacturing cloud products. 1) In 2019, the company won the honor of Huawei’s top strategic partner. Saiyi’s independent solutions have been selected into Huawei’s strict selection mall. SMOM system has entered Kunpeng ecology, accelerated the promotion of enterprise private cloud solutions, deeply participated in the Certification Institute, selected China’s excellent digital technology and software companies and delivered them to relevant enterprises. The company’s customer structure has been continuously optimized. As the company’s largest customer, Huawei’s revenue share has gradually decreased. 2) Based on the advantageous industry cooperation experience in the field of intelligent manufacturing, with the improvement of product standardization and software, the intelligent manufacturing scheme is expected to expand in depth to the subdivided industries and benefit from the support of Huawei cloud on the technology and channel side.
Maintain the “buy” rating. According to key assumptions and recent announcements, it is estimated that the operating revenue from 2022 to 2024 will be RMB 2.637/35.53/4.730 billion and the net profit attributable to the parent company will be RMB 340/4.75/646 million. Maintain the “buy” rating.
Risk warning: new business promotion fails to meet expectations; Trade friction risk; Enterprise IT investment does not meet expectations
