Report summary:
Incident: Guolian Co., Ltd. released its performance forecast for the first quarter of 2023. It is expected to achieve net profit of 2638 to 266 million yuan in the first quarter of 2023, an increase of 70.03-71.45% over the previous year, and net profit of 261-264 million yuan after deduction, an increase of 80.02% to 82.09% over the previous year.
Comment:
Performance continued to grow rapidly, and the platform strategy progressed steadily. Guolian Co., Ltd. achieved rapid performance growth for the 15th consecutive quarter. Currently, the company owns more than eight e-commerce platforms. The platform strategy is progressing steadily, and the horizontal replication expansion logic continues to be verified. At the same time, the company is actively expanding product categories on various platforms to achieve vertical industrial chain expansion. According to 2021 financial report data, for a market of more than 4 trillion dollars, the company's penetration rate is only 1%, and there is plenty of room for improvement. With the subsequent issuance of the GDR, the company had sufficient capital to maintain a high growth rate.
Driven by technology and supported by data, 100 cloud factories have been launched one after another in three years. The company cut from the trading side to the industrial Internet. With the advancement of platform operation, the digital transformation and channel connection of the supply chain and all aspects of production and operation was driven by technology, thereby achieving data accumulation and support for the entire link from production to transaction. Under the active impetus of technology and data strategies, the three-year Hundred Cloud Factory Plan will come to an end in 2023. At present, the company has gradually formed a mature profit model and is expected to further promote large-scale implementation of cloud factories in the future. On the other hand, the value of rich data resources accumulated by the company during cooperation with upstream and downstream enterprises will also be highlighted.
AI empowers the industrial Internet and continues to explore many fields. AI can empower all aspects of the industrial Internet, optimize supply chain efficiency, and reduce costs. At present, the company has explored and applied a large number of AI technologies in the fields of intelligent recommendation, sales forecasting, procurement forecasting, and machine vision on e-commerce platforms. At the same time, the company is fully connected to ChatGPT, and employees can use it in the internal management platform, including developers using ChatGPT to write basic code, and the video team generating video scripts and live streaming scripts through ChatGPT to help the company reduce costs and increase efficiency.
Investment advice: We believe that the company is a scarce industrial Internet platform with excellent growth and leading business models. With the support of AI, it is expected to open a new chapter in industrial digitalization. It is expected to achieve net profit of 11.32/19.12/3039 billion yuan in 2022-2024, an increase of 96%/69%/59% over the previous year.
The EPS was 2.27/3.83/6.09 yuan, and the corresponding PE was 31/18/11 times respectively, maintaining the “buy” rating.
Risk warning: The expansion of the new platform falls short of expectations; there is a risk that gross margin will continue to decline.