The results exceeded market expectations and the SaaS business maintained rapid growth: the company's revenue in the first half of the year was 970 million yuan, an increase of 45 per cent over the same period last year and 4.8 per cent higher than market expectations. Among them, SaaS revenue is 550 million yuan, maintaining a strong growth momentum, 66% year-on-year increase, accounting for 57% of the company's total revenue, 420 million, steady growth, 25% year-on-year growth. The adjusted net profit was 190 million, an increase of 33% over the same period last year, exceeding market expectations.
Yunke's strong revenue growth has accelerated supply chain penetration: in the first half, Yunke's revenue rose 82.1 per cent year-on-year to 430 million yuan, contributing 78 per cent of SaaS revenue. The number of sales offices equipped with Yunke in China increased 34 per cent to 16200 compared with the same period last year, and the unit price of customers increased by 37 per cent to 26000 yuan. Yunke currently maintains a high market penetration, and the future growth will come more from the increase in the unit price of customers. Among other SaaS businesses, cloud chain, cloud space and cloud procurement grew 14 per cent, 25 per cent and 77 per cent, respectively, year-on-year. The number of sites for cloud chain cooperation increased by 82 per cent to 6000, while the number of real estate developers and suppliers connected to cloud procurement increased to 3100 and 83000 respectively. In addition, the company continues to develop its supply chain business, and it is expected that the supply chain business will have the opportunity to grow rapidly in the next 1-2 years.
Continue to increase investment in research and development, short-term profits are under pressure: in the first half of the year, operating profit was 130 million yuan, down 5% from the same period last year, and operating profit margin was 12.9%, compared with 19.7% in the same period last year, mainly due to rising R & D and sales expenses. According to the division, the operating profit margin of ERP is 31.8%, compared with 44.8% for the same period last year,-4.7% for the same period last year and-3.5% for the same period last year.
The company will continue to increase R & D investment in the second half of the year, especially in key areas such as Skyline and Yunke. It is expected that the R & D team will expand to more than 2000 by the end of the year, currently about 1760. Due to the increase in R & D investment, the short-term profit side will be under some pressure.
Maintain the "buy" rating and adjust the target price to HK $38: we will slightly lower revenue by 4.5% and 3.4% in 2021 and 2022. At the same time, taking into account the recent sector valuation correction, based on the segment plus total valuation method, we have a target price of HK $38, corresponding to 25x 2021 and 18x2022, which is higher than the industry average. As the company expects higher revenue growth, the corresponding PS/G is about 0.47x, which is in line with the industry average.
Investment risk: customer growth is not as expected; the impact of the real estate industry cycle.