The overall income growth of the China News exceeded market expectations.
In the first half of 2021, the company achieved revenue of 974 million yuan (year-on-year + 45.2%) and adjusted net profit of 194 million yuan (year-on-year + 32.7%), exceeding market expectations as a whole. On the profit side, the company's gross profit margin remained at a high level of 79.76%, up 0.53% from the same period in 2020, benefiting from a further increase in the share of SAAS business.
SAAS achieved high revenue growth, revenue structure further improved sub-business structure, ERP solution achieved revenue of 422 million yuan (+ 25.1% compared with the same period last year), mainly benefiting from the company's continued expansion of head housing enterprises and sinking market developers to help customers make full use of the scalability of cloud ERP products to achieve higher implementation flexibility and development efficiency.
During the reporting period, SAAS products achieved revenue of 552 million yuan (+ 65.5% compared with the same period last year), achieving higher income growth, and the overall revenue share increased to 56.7%. In terms of segment, Yunke achieved revenue of 427 million (year-on-year + 82.1%), mainly due to the increase in customer procurement ARPU value, and the number of sales offices covered increased from 15000 at the end of last year to 16200; cloud chain achieved revenue of 79 million (year-on-year + 14.1%) to 6000 sites, up from 4100 at the end of last year; cloud space achieved revenue of 22 million (year-on-year + 25.2%) Cloud procurement achieved revenue of 20 million (year-on-year + 76.7%).
In the stock era, the digital reform may be the focus of the development of housing enterprises.
At present, the IT penetration level of China's real estate industry is still low, with only 0.1 per cent in 2019, significantly lagging behind the 1.6 per cent penetration rate of the US real estate industry. Under the new market environment, real estate enterprises are facing a new competitive pattern and development stage, which poses new challenges to the business development strategy and business management model. Continue to be optimistic about China's housing enterprises in the new competitive pattern and development stage, digital transformation to improve operational efficiency.
Risk hint: the second rebound of the epidemic may affect the business; the expansion of SAAS products is not as expected.
Investment advice: cover for the first time and give a "buy" rating.
As a provider of vertical software solutions in the real estate industry, the company is expected to accelerate its growth in various segments. It is predicted that the net profit from 2021 to 2023 will be reduced from 402 to 509 million yuan and diluted to EPS=0.20/0.26/0.33 yuan. The company is currently trading at 21 times the 2021 price-to-sales ratio. Cover for the first time, giving a "buy" rating.