I. Incident Overview
The company achieved revenue of 1,244 billion yuan in 2019, an increase of 4.62% over the previous year, and achieved net profit of 21.97 million yuan to the mother. The first quarter of 2020 achieved operating income of 305 million yuan, an increase of 21.81% over the previous year, and the net profit of the mother was 24.37 million yuan, an increase of 106.49% over the previous year. The company's business development continues to improve, benefiting from the software cloud business and the development of the Huawei ecosystem.
II. Analysis and Judgment
The cloud business continues to develop rapidly, and industry solutions have become the focus of the company's business
The first quarter of 2019 and 2020 reported continued high development of the company's cloud business, with revenue increasing by 67.09% and about 120%, respectively. Among them, the Sany Cloud desktop project confirmed in the first quarter of 2020 was about 130 million yuan, accounting for 43% of the company's first-quarter revenue. As a leading partner of HUAWEI CLOUD CSSP, the company relies on HUAWEI CLOUD and the Kunpeng ecosystem to use its own technology and channels to provide customers with industry solutions in the four areas of smart education, smart transportation, industrial Internet, and 5G smart parks, creating a leading “soft+hard” strategic collaboration model in China and jointly building the Kunpeng industrial ecosystem.
In line with technological development trends, raise funds for R&D and promotion of secure and controllable cloud platform+industry SaaS solution companies
Announcing the 2020 non-public offering plan, it is estimated that no more than 1.2 billion yuan will be raised to supplement the industry's smart cloud solutions, cornerstone research institutes, sales and system construction, and working capital. The company hopes to develop a unified industry application platform for Topway Information based on the Huawei Kunpeng and HUAWEI CLOUD technology platforms. Through a unified technology platform and industry-integrated solutions, it opens up applications in smart education, industrial Internet, 5G smart parks and other industry markets and scenarios, establishes industry benchmark projects and promotes its own HUAWEI CLOUD solution products by providing secure and controllable cloud platforms+industry solutions.
III. Investment Suggestions
Maintain a “Recommended” rating. The company's software cloud related business is developing rapidly, industry solutions built on the Huawei ecosystem continue to advance, the education informatization business is developing relatively smoothly, and the online education center has benefited from the promotion of online education. Therefore, we expect the company's EPS for 20-22 to be 0.08/0.11/0.15, and the corresponding current PE price is 116X/84X/59X. Currently, the comparable company Chengmai Technology Wind's PE in 2020 is 198X. Considering the rapid development of the company's cloud business, it maintains a “recommended” rating.
4. Risk Reminder:
The promotion of industry solutions fell short of expectations, and competition in the education information technology industry intensified