China's leading real estate ecological chain digital service provider, sustained high growth prospect company focuses on providing ERP solutions and SaaS products to real estate developers and other participants in the industrial chain to help them achieve fine management and digital transformation of their business. From 2017 to 2020, the company's total revenue showed a trend of rapid growth, with a CAGR of 43.3% and a gross profit margin of around 80%. In 2020, SaaS business revenue grew strongly, reaching 871 million yuan, an increase of 70.9% over the same period last year, and made a profit for the first time; ERP business grew steadily, with revenue reaching 834 million yuan, an increase of 10.6% over the same period last year. From 2017 to 2020, the CAGR of the company's net operating cash flow was 26.0%, which continued to be larger than the adjusted net profit, reflecting a higher operating quality.
The demand for fine management is exuberant, the real estate information market space is broad in recent years, the overall growth rate of the real estate industry has gradually slowed down, the "three red lines" policy has hit the pain points of the industry, and the competition in the real estate market has gradually intensified. At the same time, cutting-edge information technology continues to emerge, driving the continuous growth of the real estate industry's demand for digital operations. According to Frost Sullivan, in 2019, the penetration rate of China's real estate industry chain software solution market was 0.10%, much lower than the 1.55% of the United States. China's real estate industry chain software solution market will grow from 17 billion yuan in 2019 to 65.5 billion yuan in 2024, with CAGR reaching 30.97%. The market for software solutions of Chinese real estate developers is relatively concentrated. With rich industry knowledge and complete product matrix, the company ranks first with a market share of 18.5%, and is expected to continue to lead the industry.
SaaS products and ERP solutions two-wheel drive, direct sales and channel distribution quickly occupy the market SaaS products are in a period of rapid development, in which cloud guest business accounts for the highest proportion of revenue, penetration and customer unit price increase rapidly. SaaS products show high customer stickiness, and all four major businesses achieve a customer retention rate of more than 80%, of which Yunke's retention rate is up to 90%. For ERP business, follow-up service business is the main engine of future revenue growth. In the future, the company will continue to invest in the open platform of the sky to accelerate the pace of ecological opening. In addition, the company develops customers in first-tier cities through direct sales teams and relies on channel distribution for the sinking market of small and medium-sized real estate developers, both of which help the company to occupy the market quickly.
Profit forecast and investment suggestion
The company is a leading digital service provider of real estate ecological chain in China. Adhering to the business philosophy of professional success, product leading strategy and successful users, the company continues to plough deeply in the field of digital real estate ecological chain, and has a broad space for growth in the future. It is predicted that the operating income of the company from 2021 to 2023 is 23.42,31.78 and 4.326 billion yuan, the net profit is 3.17,4.78 and 709 million yuan, the EPS is 0.16,0.24,0.36 yuan per share, and the corresponding PE is 129.68, 85.95,57.94 times. Recommend for the first time, give a "buy" rating.
Risk hint
The prosperity of the real estate industry is declining; the expansion of downstream customers is not as expected; the ability of technology and innovation can not keep up with customer demand; market competition intensifies.