Performance summary: In 2020, H1 achieved operating income of 230 million yuan, an increase of 5.2% over the previous year; net profit attributable to shareholders of listed companies was 35.99 million yuan, an increase of 1.8% over the previous year; Q2 achieved operating income of 130 million yuan in a single quarter, an increase of 12.7% over the previous year; and achieved net profit of 19.159 million yuan, an increase of 1.9% over the previous year.
Multi-platform operation, huge users use data to help product development. The company continues to develop e-commerce platforms other than Taobao and Tmall to optimize the company's products in response to platform characteristics and rules. It has now expanded e-commerce businesses on other major e-commerce platforms such as JD, Pinduoduo, Are You Hungry, Suning, Mushroom Street, Lazada, etc. In the first half of 2020, the company expanded various platforms such as Kuaishou and Douyin, and revenue from multiple platforms showed rapid growth. The company is one of the e-commerce SaaS service providers that have accumulated the highest number of paying users in the Alibaba merchant service market. The huge user base has enabled the company to accumulate a large amount of usage data, have a deeper understanding of the needs of e-commerce merchants, and the products developed are more in line with the needs of e-commerce merchants.
The fast growth rate of Kuaimai series products is expected to become a new growth point. While continuing to steadily cover micro, small and medium-sized e-commerce customers, the company also focuses on covering mature and branded merchants with high customer stability, demand for more vertical segmentation functions, and stronger payment purchasing power. By sorting through the various business processes of medium and large merchants, the company continuously explores the pain points of medium and large customers, and achieves rapid growth in the Kuaimai series products for large customers. The company is expected to increase the market share of large and medium-sized customers and increase customer unit prices.
Long-term optimism is that the SaaS service of reserve business enterprises will grow rapidly. The “Youcheng” series of products laid out by the company in 2018 is a product developed based on the Alibaba DingTalk platform to improve office efficiency and management level for enterprises in all aspects, including Youcheng Finance, Youcheng CRM, Tomato Form, etc. In 2020, catalyzed by the epidemic, enterprises began using online collaborative office software such as DingTalk, which contributed to the rapid growth of corporate office SaaS services, which increased 193.4% year-on-year in the first half of the year.
Profit forecasts and investment recommendations. We expect the amortized EPS for 2020-2022 to be 0.30 yuan, 0.34 yuan, and 0.40 yuan respectively, and net profit attributable to the mother will maintain a compound growth rate of 18.5% over the next three years. Considering that the company is a leader empowered by new retail technology, e-commerce dividends are clearly driven, and there is considerable room for long-term expansion. For the first time, coverage was given a “hold” rating.
Risk warning: The impact of the epidemic is uncertain; the multi-platform expansion of small and medium-sized e-commerce SaaS products fell short of expectations; sales channels and customer expansion of Kuaimai ERP products fell short of expectations.