The company released its 2023 annual report. The business growth rate of large enterprise customers was affected by organizational changes in the short term, and the business of small and medium-sized enterprise customers maintained rapid growth
The company released its 2023 annual report and achieved annual revenue of 9.796 billion yuan, an increase of 5.8% over the previous year. Among them, the cloud service business achieved revenue of 7.091 billion yuan, an increase of 11.6% over the previous year.
By customer type, the company's large enterprise customer business achieved revenue of 6.519 billion yuan, an increase of 4.3% over the previous year. The phased impact of the organizational model upgrade gradually passed, and revenue increased 12.4% year on year in the second half of the year. Looking at the whole year, the contract amount for large enterprise customer business excluding those operated by subsidiaries increased by more than 30% year-on-year in the second half of the year. YonBip, the company's core product, achieved a contract amount of 3.61 billion yuan throughout the year, and the renewal rate for core products was 92.9%.
Looking at medium-sized enterprises, the companies YonSuite, U9cloud, and U8cloUD continued their efforts to achieve revenue of 1,386 billion yuan in the medium-sized enterprise market, an increase of 21.4% over the previous year. Among them, the cloud service business achieved revenue of 86.5 billion yuan, an increase of 36.9% over the previous year, and the renewal rate for core products was 84.3%. The number of Yon Suite customers and revenue both achieved a rapid increase of more than 100% year over year, and the contract amount was about 280 million yuan, an increase of nearly 90% year over year.
Furthermore, in the small and micro enterprise market, Changjietong achieved revenue of 806 million yuan, an increase of 17.7% over the previous year. Among them, cloud subscription revenue was 490 million yuan, an increase of 28.0% over the previous year. Changjietong turned a loss into a profit in '23; the corporate government and other public organizations achieved revenue of 982 million yuan, a decrease of 12.5% over the previous year.
Product iteration continues, and costs and expenses are expected to be further optimized. In 24 or 2023, the company achieved a net loss of 967 million yuan to the mother, with a year-on-year loss of 967 million yuan, mainly due to a decline in revenue growth and a significant increase in expenses. The company increased personnel investment in 2021-2022, and the average annual number of people increased by 1,896 people year on year; on the other hand, after the company's industry organization model was upgraded, travel expenses and market expenses increased a lot. At the same time, outsourcing costs increased more year on year, leading to short-term pressure on profits.
On the product side, in 2023, the company released BIP3-R2, which has more powerful technical and product capabilities, more stable performance, and better experience. In addition, the company released Yon GPT, a major enterprise service model, covering various production and operation fields such as finance, manpower, and marketing.
In 2024, the company began planning to control costs and expenses, optimize the personnel structure and improve labor efficiency. As the impact of the company's organizational model changes comes to an end and products continue to iterate, we expect the company to usher in an inflection point in revenue and profit performance in 2024.
Investment advice: In line with the 2023 annual report, considering the impact of organizational strategy adjustments in 2023, we adjusted the profit forecast. Revenue was adjusted from 123.09/15.80 billion yuan in 24-25 to 109.22/126.05/14.719 billion yuan in 24-26, and net profit to mother was adjusted from 527/1.405 billion yuan in 24-25 to 0.944.39/638 million yuan in 24-26, maintaining a “buy” rating.
Risk warning: industry competition intensifies; business expansion of large enterprises falls short of expectations; product iteration falls short of expectations