Event

The company achieved revenue of 970 million yuan in the first half of 2021, an increase of 45.2% over the same period last year, of which SaaS revenue accounted for 56.7%, an increase of 7% over the same period. The gross profit was 774 million, an increase of 46.2% over the same period last year, and the gross profit margin was 79.8%. The company's adjusted net profit in the first half of the year was 190 million yuan, an increase of 32.7% over the same period last year.

Brief comment

Rapid growth in SaaS and ERP revenue

SaaS's revenue was 550 million yuan, an increase of 65.5% over the same period last year, mainly driven by the growth of Yunke. SaaS contract liabilities reached 9.8 million, up 69.8% from the same period last year, 15% higher than the growth rate in the second half of last year, laying the foundation for future performance growth. Revenue from ERP solutions was 420 million yuan, an increase of 25.1% over the same period last year.

SaaS gross profit margin dropped slightly, and Yunke's growth exceeded expectations.

The gross profit margin of SaaS is 89.7%, slightly lower than that of 90.4% in the same period, affected by the increase in hardware costs and employee benefits. SaaS lost 26.9 million, up 120.5% from a year earlier. ERP's gross profit margin was 66.1%, down 1.5 percentage points from the same period, and its profit for the period was 140 million, down 3.2% from the same period last year. The situation of each cloud business is as follows:

Yunke's revenue was 430 million yuan, an increase of 82.1% over the same period last year, which exceeded expectations, mainly due to the increase in customer unit price and penetration at the same time. The number of sales offices equipped with Yunke in China is 16200, an increase of 34 per cent on the basis of high penetration. The ARPU value significantly increased to 26000, an increase of 37% over the same period last year. It is judged that there is still room for further price increases in the future, mainly due to the increase of the handheld cloud store module and the reduction in the proportion of group procurement.

The revenue of cloud chain was 80 million, an increase of 14.1% over the same period last year. The slowdown is mainly due to the decrease of ARPU by 13000. The company's cloud chain business is in the process of streamlining modules, and currently focuses on expanding the number of customers, which is the main reason for the reduction of ARPU. The number of cooperative sites has grown rapidly, with the number of 2021H1 reaching 6000, an increase of 82% over the same period last year.

Cloud space revenue was 22 million, an increase of 25.2 percent over the same period last year. The area of cloud property management and cloud property management doubled to 190 million square meters, and the number of cooperative shopping malls also increased by 56 percent to 114.

Cloud procurement revenue was 20 million, an increase of 76.7% over the same period last year, and both customer unit price and penetration rate increased. Connect 3100 real estate developers, a growth rate of 11%, and 83000 suppliers, a growth rate of 17%.

Continue to increase R & D efforts, customer cooperation has made steady progress

The R & D fee was 26.2%, an increase of 4% over the same period. The company's R & D personnel increased by 65.8% to 1759 compared with the same period last year, and R & D investment exceeded 250 million, an increase of 71.9% over the same period last year. The investment direction is to continuously strengthen the five independent capabilities of Skyline platform and new product research and development. Among them, the basic version of the Skyline open platform achieves zero code, cooperates with 1500 + customers, and the development version achieves low code. For customers with certain development capabilities, it has reached cooperation with several head housing enterprises; it is expected to release SDP in the supply chain in the second half of the year, and AI China Taiwan, IoT and VR are the key investment directions in the future. The sales rate is 39.6%, an increase of 5% over the same period, mainly due to the increase in commission fees caused by the increase in revenue from SaaS products, and the company continues to increase the number of marketing team personnel.

In stable cooperation with 96 of the top 100 housing enterprises, the customer unit price has increased significantly by 61% to 3.08 million, reflecting the increase in customer trust in the head. The total number of cooperative developers is 5200, an increase of 44% over the same period last year, and the sales and service team covers 80 cities across the country.

Outlook for the future: SaaS continues to invest, comprehensively open up the state-owned enterprise market, the scale of the real estate industry continues to improve, the three red line policy regulation and control will promote the healthy development of the industry. The company has entered the stage of incremental development and stock business at the same time, state-owned enterprises will play an important role, through digital housing enterprises to increase revenue and reduce expenditure is the focus of future competition.

The company's business development strategy is as follows: 1) to continuously increase investment in SaaS business to ensure sustained and rapid growth; at present, to achieve 100% holding of SaaS business, which is conducive to the further integration of the ecological chain; 2) to maintain the market share of the top 100 real estate enterprises and increase the depth of cooperation; 3) firmly open up the sinking market and plan to enter 100 cities throughout the year. 4) the market strategy of new state-owned enterprises, relying on existing products to launch comprehensive solutions suitable for state-owned enterprises; 5) comprehensively increase investment in the Skyline platform, and build an industrial cooperation ecology by means of co-construction, investment, mergers and acquisitions.

Profit forecast and valuation

We expect the company to achieve revenue of 2.44 billion, 3.37 billion and 4.63 billion in 2021-2023, and net profit of 400 million, 640 million and 960 million, excluding equity incentive fees, and maintain a "buy" rating.

Risk hint

SaaS business growth is not as expected, cloud guest, cloud chain business ARPU promotion is not as expected, real estate industry policy fluctuations.