Current price (24 Aug): $11.15
Market capitalization (millions of US dollars): 6241.32
Up / down space: 142.2%
Event: on August 18, 2021, Beijing time, the company announced 2021Q2 results, with revenue of US $84.7 million, year-on-year + 118%, net loss of US $38.1 million, year-on-year + 159%, 6% narrowed month-on-month. Non-GAAP 's net profit margin was 31.3%, up slightly from 35.7% in the same period last year.
Our view:
The cloud platform access category of the company's Internet of things continues to expand, extending to different scenarios downstream.
The company's Q2 revenue exceeded the total revenue guidance given by Q1 ($7800-$81 million), and the company's IoT PaaS cloud platform earned $76.9 million in the second quarter, + 163.9% year-on-year. We believe that it is driven by the following core factors:
1) the number of products connected to the company's PaaS cloud platform has greatly expanded, with about 100000 new SKU devices added to Q2, smart phone washing, lifting tables and chairs, wine freezers and other categories, as well as unmanned gyms, airports, unmanned study rooms, plant sheds and other scenes.
2) the number of customers and revenue retention are further improved, and the follow-up customer transformation and product volume are expected to continue to drive. In terms of the number of customers, the company had 285 customers with revenue exceeding US $100000 in this quarter, and the net income expansion rate reached 211% more than 160% in seven quarters. As of August 2021, the company has added important customers such as KE Holdings Inc, Lego Group and Jiangsu Zongshen. Follow-up customer transformation and product volume is expected to continue to drive.
SaaS business extends from intelligent community and hotel to intelligent operation and intelligent industry.
In 2021, Tuya Inc. 's SaaS and other income increased by about 171.4% year-on-year to US $3.4 million. We believe that the company's SaaS is expected to continue to grow, mainly in the smart community, smart hotel in a variety of things to achieve the Internet of things component. For example, the leading real estate group continues to cooperate with the company and its hardware ecological partners in community projects because of its rich hardware ecology and software capabilities of the Internet of things platform. In addition, the company has also entered the field of intelligent self-service equipment, enabling the intelligent operation of all kinds of self-service equipment, such as entertainment, life, retail and so on. The future is worth looking forward to in smart industry, smart operation and global SaaS business.
The ecology of the development platform of the Internet of things has been further improved, and investment in research and development has been increased.
The company is committed to decoupling the different operating functions and use cases of the Internet of things platform into a single component, so as to meet the needs of developers. The number of developers increased from 320000 at the end of the first quarter to 380000 at the end of the second quarter. In order to develop different categories, scenarios, communication protocols and R & D developer platforms, the company has increased its investment in research and development. This quarter, the company invested US $42.7 million in R & D, excluding equity incentive expenses of about $39.7 million. It accounts for more than 45% of the total revenue, and the number of R & D personnel has reached 2570, an increase of about 120% over the same period last year and about 72% of the total number of employees. In addition, the company has also built a comprehensive security system, covering the data trinity of security defense, privacy protection and system audit. In the second quarter, the company passed the ioXt Alliance Internet of things security certification evaluation and became a member.
Revenue guidance for the third quarter ranges from $83 million to $86 million
The company expects that downstream customers may face short-term challenges in the third quarter, including Amazon.Com Inc seller policy, rising raw material prices and shortage of semiconductor components, we believe that from a seasonal point of view, July and August are usually the off-season for consumer electronics OEM, in addition, the company will continue to support customers to continue to expand downstream applications through the powerful features and innovation of the Internet of things platform. To support customer sales in the third quarter and throughout the year.
Investment suggestion: we believe that in the trend of increasing penetration and intelligence of the Internet of things, the company as a third-party cloud platform has a broad market space and ecological prospects. We are optimistic about the company's high retention rate and revenue growth driven by new scenarios and the gradual creation of network effects in the future. The company is expected to earn $3.25.3\ 830 million respectively in 21-23 years, compared with the same period last year. Non-GAAP net profit-0.90-1.1-$150 million, given a target price of $27, a "buy" rating.
Risk tips: new customer expansion and revenue expansion rate is lower than expected, downstream demand, macroeconomic risks, increased competition
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