Incidents:
The company released the “2021 Semi-Annual Report” after the market closed on August 24, 2021.
Commentary:
Revenue continued to grow rapidly. Revenue from smart construction site products increased 54.06% year-on-year in the first half of the year. The company's key tasks progressed in an orderly manner, achieving revenue of 193 million yuan, an increase of 30.93% over the previous year, and achieving net profit of 39 million yuan, an increase of 8.24% over the previous year. By product, smart construction site products achieved revenue of 92 million yuan, an increase of 54.06% over the previous year, and the business share increased to 48.02%. The main reason was that the company increased its marketing channel layout, increased the coverage of key projects, and enhanced product competitiveness through iterative upgrades of core products and after-sales service system construction. Among them, tower crane monitoring, elevator monitoring, and platform products all maintained rapid growth, and visual AI products achieved significant growth. Building information software achieved revenue of 100 million yuan, an increase of 14.98% over the previous year. Among them, the BIM software module update met market demand, which led to an increase in the overall performance of building information technology software. By region, companies focused on regions such as East China, Central China, and South China all achieved rapid growth.
R&D enables long-term growth and continuous iteration of core products
The company maintained a high proportion of R&D investment. The R&D investment in the first half of the year was 44 million yuan, an increase of 30.0% over the previous year.
At the end of the period, there were 533 R&D personnel, an increase of 35.3% over the previous year, accounting for 42.6% of the company's total number. In terms of smart construction, the company has iteratively optimized and upgraded its core products, and launched a variety of new products, including new video AI products, gondola monitoring systems, and measurement measurement systems. In terms of BIM software, the company promoted the implementation of scenario-based applications of BIM software, further strengthened the research and development of tool software features, enhanced the professionalism and interactivity of the software, and upgraded BIM products such as HiBIM, field cloth, and template. In addition, the company has increased research and development of digital intelligent platforms for construction companies, and developed certain product capabilities to help enterprises empower projects and implement the application of new technology in projects.
Deepen the layout of marketing channels and improve market coverage
The company accelerated the pace of marketing network construction. The sales expenses in the first half of the year were 56 million yuan, an increase of 37.5% over the previous year, and the number of sales-related personnel reached 565, an increase of 35.2% over the previous year, accounting for 45.2% of the company's total number. The company, together with the China Construction Industry Association and other associations, jointly organized a series of large-scale industry forums to strengthen the company's brand image building and brand influence; held high-level seminars for construction enterprises and a national tour of digital construction in many parts of East China, Central China and South China, covering key leaders in the digital construction of projects and enterprises, and strengthening the promotion of digital construction concepts and products. Through multi-level brand marketing activities, the company's brand awareness and reputation have continued to improve, which has played a positive role in the company's business development.
Investment advice and profit forecasting
The company focuses on “digital construction” applied technology and products during the construction phase, and continues to explore the blue ocean market by increasing investment in R&D. The company's revenue for 2021-2023 is predicted to be 517, 693, and 921 million yuan, net profit attributable to the mother is 135, 178, 233 million yuan, EPS is 2.47, 3.27, and 4.29 yuan/share, and the corresponding PE is 28.33, 21.41, 16.34 times. Currently, the PE TTM of the Computer (Shenwan) Index is 54.3 times. Since listing, the company's PE has mainly operated between 35-50 times. The net profit CAGR for the next three years is expected to be 33.67%. Considering changes in industry valuation levels, the company's target PE for 2021 was lowered to 45 times, and the target price was 111.15 yuan. Maintain a “buy” rating.
Risk warning
The COVID-19 pandemic has been repeated; downstream has been greatly affected by the policies and prosperity of the real estate industry; sales regions are concentrated; the development of some software products depends on the basic software development environment provided by Autodesk, etc.