Northeast Securities released a research report stating that it has initiated coverage of EDIANYUN (02416) with a "Buy" rating. The bank predicts that during this economic cycle, an increasing number of small and medium-sized enterprises will enhance their risk resistance by leasing equipment from office equipment suppliers, leading to sustained growth in the company's performance. It is expected that the company's revenue for 2024-2026 will be 1.336/1.604/2.13 billion yuan, and the net income attributable to the parent company will be 0.047/0.148/0.267 billion yuan.

The main points of the report are as follows:

The company provides on-demand office IT integrated solutions and other services as a cloud computing service enterprise.

The company mainly offers office IT integrated solutions through an on-demand subscription model, developing various products to meet multiple customer needs. This model provides customers with hardware, Saas software, and handles device configuration, device/engineer deployment, operation support, performance optimization, and device management services (including ordering devices, subscription management, on-site inspections, and bulk shipments), all included in one service package. Customers can flexibly subscribe to or cancel office IT services based on changing demands. This can help clients maximize the stable running time of office IT, save operating costs, enhance employee productivity, and drive business growth. The Saas product EDIANYUN Inventory aims to assist corporate clients in managing assets and inventory from procurement and storage to usage and disposal, charging an annual subscription fee. As of the first half of 2024, the company had 49,737 active clients, a year-on-year growth of 10.4%, with a high client retention rate remaining stable compared to the same period last year; the number of serviced devices approached 1.33 million, a year-on-year increase of 15.6%.

Continuously iterating product tiers to meet the needs of small and medium-sized clients.

Under economic pressure, small and medium-sized enterprises are shifting their demand for office IT equipment to lower-priced devices. Therefore, in response to the macroeconomic impact and changes in customer demand, the bank has proactively developed and launched the EDIANYUN A101 all-in-one machine. This product meets the IT needs of common positions in small and medium-sized enterprises with its simple appearance and leading performance, while significantly reducing the monthly subscription fee. Due to the joint effects of the new product launch and more effective sales strategies, the average number of subscriptions per existing client increased from 28 units/client to 29 units/client, and the average number of subscriptions per new client grew from 15 units/client to 17 units/client. This resulted in a net increase of approximately 0.125 million units in the first half of the year, a significant improvement compared to -0.055 million units in the first half of 2023, getting back on the growth track.

Continuously deepening the AI field and partnering with Microsoft to develop new hardware products.

On February 22, 2024, the company announced the establishment of a strategic partnership with The Cigna Group, an authorized dealer of Microsoft in China, taking solid steps in the AI field. The bank bases its services on Microsoft Azure.

OpenAI

The GPT product has expanded and upgraded through technology to create the EDIANYUN product, which is more suitable for small and medium-sized enterprises. The institution believes that as the company continues to deepen its efforts in the AI field, it is expected to connect deeply with approximately 0.05 million small and medium-sized enterprise clients through the main business of corporate IT subscriptions, helping these enterprises to establish their own AI capabilities and better serve the vast corporate services market in the future.

Risk Warning: The company's business expansion may not meet expectations, and the profit forecast may also fall short of expectations.