\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 588 Yonyou Network Technology Co.Ltd(600588) )
] event overview
On April 29, 2022, Yonyou Network Technology Co.Ltd(600588) released the report for the first quarter of 2022. In the first quarter of 2022, the company achieved an operating revenue of 1.279 billion yuan, an increase of 5.4% year-on-year. The company’s net loss attributable to shareholders of listed companies was 393 million yuan, and the net loss attributable to shareholders of listed companies after deduction was 362 million yuan.
The growth of main business is in line with expectations, and the change of revenue structure continues to verify the effectiveness of cloud transformation
The company’s main cloud service and software business achieved a revenue of 1.270 billion yuan, with a year-on-year increase of 20.1%. In the first quarter, some parts of China still achieved rapid growth under the influence of covid-19 epidemic, highlighting the driving force for the development of the company’s main business.
The income from financial services business reached 09 million yuan, a year-on-year decrease of 147 million yuan, a year-on-year decrease of 94.1%, which is in line with the company’s business adjustment strategy. In the company’s main cloud service and software business revenue, the cloud service business revenue reached 748 million yuan, a year-on-year increase of 45.1%, and the software business revenue reached 522 million yuan, a year-on-year decrease of 3.7%.
The company’s contract liabilities reached 2.265 billion yuan, of which the contract liabilities related to cloud business reached 1.715 billion yuan, an increase of 8.5% over the end of last year, an increase of 39.5% over the end of the first quarter of last year, and the contract liabilities related to subscription reached 961 million yuan, an increase of 13.4% over the end of last year and an increase of 95.5% over the end of the first quarter of last year. While the company has achieved rapid growth in its main business income, its business income structure is better, and the effectiveness of cloud transformation has been continuously verified.
The contracted amount in the large-scale enterprise market has increased rapidly, the cloud business in the medium-sized enterprise market has doubled, and the cloud transformation in the small and micro enterprise market has been successful
In the large enterprise market, the revenue from cloud service and software business was 814 million yuan, a year-on-year increase of 19.9%, of which the revenue from cloud service business was 472 million yuan, a year-on-year increase of 29.1%. The company’s strategic customer business headquarters for super large enterprises continued to make breakthroughs, and the contract amount increased by more than 60% year-on-year. The first-class units of central enterprises signed an overall contract to add three gorges group and China salt group. During the reporting period, the renewal rate of cloud service business of large enterprises reached 108%. We believe that the large enterprise market, as the company’s “main granary”, has laid a solid foundation for the annual performance with the high growth of the contract amount.
The medium-sized enterprise market continued to accelerate the cloud transformation, realizing a cloud service and software business revenue of 203 million yuan, a year-on-year increase of 42.4%, of which the cloud service business revenue reached 89 million yuan, a year-on-year increase of 165.6%, and the public cloud subscription business doubled. During the reporting period, the renewal rate of cloud service business of medium-sized enterprises reached 84%. We believe that the medium-sized enterprise market is expected to be a strong driving force for the growth of the company’s subscription related contract liabilities. The cloud service and software business revenue in the small and micro enterprise market was 161 million yuan, a year-on-year increase of 57.6%, of which the SaaS subscription revenue was 85 million yuan, a year-on-year increase of 94.8%, and the subscription revenue accounted for more than 50% of the overall revenue of changjietong. The number of new paying enterprise users of cloud service business exceeded 31000, a year-on-year increase of 40%, and the cumulative number of paying enterprise users exceeded 428000. We believe that in the small and micro enterprise market, changjietong’s “cloud transformation” has been successful.
Continuous high investment in R & D and IUAP platform to build a new base for digital intelligence of enterprises
In the first quarter, the company invested 622 million yuan in R & D, a year-on-year increase of 40.6%. By the end of the first quarter, the number of R & D personnel had increased by 368 compared with the end of last year, accounting for 36.4% of the total number of employees, which is the personnel category with the highest proportion. The company’s continued investment in R & D has supported and promoted the accelerated breakthrough of UFIDA BiP in platform technology and digital intelligence application.
On April 19, the company held the “2022 UFIDA BiP Technology Conference” with the theme of “UFIDA IUAP platform – a new base for enterprise digital intelligence”, and released the white paper of UFIDA bip|iuap platform. Technically, UFIDA IUAP’s YMS cloud middleware technology realizes cross cloud technology breakthrough and multi cloud adaptation capability; Provide an integrated delivery system on and off the cloud, so that the enterprise private cloud platform can experience the update efficiency of the public cloud; Provide multi tenant and multi data center technology, realize multi cloud heterogeneous “management on the cloud and operation under the cloud”, and create a new model of highly reliable public cloud and exclusive cloud. In terms of architecture, IUAP provides a social business architecture, which can support social level digital modeling, break the boundaries of enterprises, and enable enterprises to realize the landing of social level commerce and industrial Internet through connection, sharing, transaction and collaboration. In terms of scenario application, UFIDA IUAP has built a new base for enterprise digital intelligence through “three middle Platforms + three platforms”.
Investment advice
We keep the profit forecast unchanged: the revenue forecast for 22-24 years is RMB 106.62/133.71/17.109 billion respectively, the earnings per share (EPS) for 22-24 years is RMB 0.45/0.54/0.69 respectively, corresponding to the closing price of 19.14 yuan / share on April 29, 2022, and the PE is 43.0/35.6/27.6 times respectively, maintaining the “buy” rating of the company.
Risk tips
1) the domestic substitution process is not as expected; 2) The promotion of cloud products is lower than expected; 3) Industry competition intensifies; 4) Macroeconomic downside risks; 5) Market systemic risk.
