1H22 performance is slightly lower than we expected.
Guangyun Technology announced its results in the first half of 2022: realized income of 251 million yuan, year-on-year-5.7%; net profit of-78 million yuan, deducting non-return net profit of-83 million yuan, and increased loss over the same period last year. In order to continue to promote the large merchant business 1H22, the company increased manpower costs such as sales and R & D teams, and confirmed the investment loss of the associated enterprise of-21 million yuan, which affected the performance of the profit end. In the single quarter of 2Q22, the income was 127 million yuan,-8.5% compared with the same period last year; the net profit was-47 million yuan, and the net profit after deducting non-return net profit was-50 million yuan, which increased the loss over the same period last year. Due to the objective impact of the epidemic on business development and the company is still expanding investment, the company's overall performance is slightly lower than we expected.
Trend of development
Core e-commerce SaaS products maintained positive growth, operations and CRM business shrank. 1H22's core e-commerce SaaS product revenue from + 2.9% to 200 million yuan year-on-year, accounting for a year-on-year increase of about 7 ppt to 80%, supporting hardware / operational services / CRM text message revenue, respectively, + 10% compared with the same period last year. The composite gross profit margin remained at 60%, with a slight decline. Affected by a slight decline in gross profit margin of SaaS products (year-on-year-1ppt) and a slight increase in the share of hardware revenue with low gross margin, 1H22 gross profit margin remained at a high level year-on-year-2ppt to 62%. The continuous increase of investment and the recognition of investment losses by associated enterprises affect the performance of net profit. 1H22 continues to increase investment in R & D of SaaS products from big merchants, and strengthens the construction and management of direct selling networks nationwide. The rate of R & D / sales / management expenses is + 92kg / 5ppt, respectively, compared with the same period last year. At the same time, as the company's associated enterprises (caravan ERP, etc.) are in the early stage of development, the impact of the epidemic has a loss, which confirms an investment income of about-20 million yuan, and multiple factors make the loss enlarge compared with the same period last year. We expect the business situation to improve in the second half of the year as the external environment improves.
The SaaS of big businesses overcame the unfavorable factors of the epidemic and increased against the trend. The epidemic objectively affects offline sales activities in key regions such as the Yangtze River Delta and Pearl River Delta, and the obstruction of operation and delivery of some e-commerce merchants affects their ability and willingness to pay for SaaS products to a certain extent, but even under the background of unfavorable external environment, the SaaS income of big merchants of 1H22 has still achieved a growth rate of 36% compared with the same period last year, of which the number of effective payment households of the core product Express ERP increased by 38% compared with the same period last year. Small and medium-sized merchants SaaS continues to promote the multi-platform strategy. Since 2020, the company has complied with the market trend and accelerated the layout of Taowai platforms for small and medium-sized e-commerce SaaS products, and has achieved remarkable results in recent years. Taking delivery assistants as an example, 1H22's Douyin platform accounts for + 235% of fee-paying households and + 225% of revenue over the same period last year, and the overall share of revenue from multiple platforms has increased to 46%. In addition, enterprise services SaaS is also growing faster (+ 41 per cent compared with the same period last year), benefiting from increased demand for online collaboration.
Profit forecast and valuation
In the first half of the year, the epidemic affected income growth and increased losses. We lowered the revenue forecast of 2022 Universe by 2.6% to RMB 600 million in 2023, and the profit forecast of 2022 by 2023 was reduced from-0.4 billion to-1.1 billion. Maintain the outperform industry rating and maintain the target price of 11 yuan (based on 2022 SOTP), which has 21% upside compared to the current stock price. The current share price corresponds to the price-to-sales ratio of 6x6x2022x2023.
Risk.
The number of households paying fees for traditional products has declined; the promotion of new products has not been expected; and the cost investment has exceeded expectations.