Ming Yuan Cloud Group is a leading digital service provider of real estate ecological chain in China. The company specializes in providing SaaS products and ERP solutions to Chinese real estate developers and other industry participants in the real estate ecological chain to help customers achieve refined and digital operations. In the first half of 2021, thanks to the steady development of the real estate industry, the company's revenue rose 45% year-on-year to 970 million yuan, while adjusted net profit rose 33% year-on-year to 190 million yuan, both exceeding market expectations.
SaaS business continues to grow rapidly: according to Zhiyan Consulting Research Institute, the market penetration of software solutions in China's real estate industry was only 0.1% in 2019, far lower than 1.6% in the United States, and is expected to reach 0.3% by 2024 under the current market environment. It has become an industry consensus to change the operation level of Chinese real estate enterprises through information construction. Ming Yuan Cloud Group, as the leading real estate software solution company in China, in the context of digital and information construction, SaaS business maintained rapid growth in the first half of 2021, with revenue up 65.5% year-on-year to 550 million yuan. As the company's most mature SaaS product, Yunke's revenue in the first half of the year increased by 82.1% to 430 million yuan. The number of sales offices equipped with Yunke in China reached 16200.
Tianji Open platform enhances market competitiveness: in the first half of 2021, the number of top 100 real estate developers cooperating with Ming Yuan Cloud Group reached 96, and the total number of cooperative real estate developers reached 5200, superimposed on the current development trend of the real estate market. The depth of cooperation with customers will become the key development direction of Ming Yuan Cloud Group in the future. The strong scalability and connectivity of the Skyline open platform enables its SaaS products and ERP solutions to help customers run their business more efficiently and intelligently within the enterprise and with their business partners. In the future, the company can actively infiltrate the upstream and downstream of the state chain through the Skyline open platform, effectively integrate the previously scattered product chain, in order to meet the changing customer needs, further optimize the customized services of major customers, and strengthen the depth of cooperation.
Investment advice: Ming Yuan Cloud Group ploughing the real estate industry for 20 years, is the real estate industry SaaS track leading company, strong competitiveness, future performance is expected to maintain rapid growth.
The average target price on the Bloomberg market is HK $46.219, corresponding to an increase of 81.6%. Buy is recommended.