Event: according to the 2022 semi-annual report, the company achieved HK $2.517 billion in operating income, + 65.79% year-on-year, and its mother's net profit was HK $34 million, + 78.38% year-on-year, exceeding market expectations.
The company's business expanded rapidly and its performance exceeded market expectations: in 2022, H1 realized operating income of HK $2.517 billion, + 65.79% compared with the same period last year, of which cloud service revenue was HK $581 million, year-on-year + 81.84%, management software revenue HK $1.216 billion, year-on-year + 19.04%. The company's investment and expansion in the customer market of state-owned enterprises continues to increase. The company has strengthened the market development of the grain industry and the communications industry this year, and the benchmarking project has enhanced the product influence. The H1 Internet of things solution in 2022 is HK $720 million, which is + 306.02% compared with the same period last year. The net profit is 34 million Hong Kong dollars, + 78.38% compared with the same period last year. The high net profit is due to the good growth of the company's management software business. In 2022, the operating profit of H1 management software business was 147 million Hong Kong dollars (year-on-year + 33.31%).
High intensity of R & D investment and continuous iteration of products: the R & D expenditure of H1 Company in 2022 was HK $279 million, an increase of 46.24% over the same period last year, mainly due to the increase in R & D investment in cloud service business, the company's expansion of R & D personnel, and the corresponding increase in manpower costs for R & D. maintain rapid growth. On the basis of the company's high R & D investment, the company broke through the key core technologies such as flexible cloud primary micro service middleware and zero code modeling, released new products such as new generation enterprise PaaS platform iGIX5.0 and new generation large enterprise cloud ERP GS Cloud3.5, and continuously optimized iterative cloud professional human resources platform HCM Cloud, to help large enterprises build an independent and controllable digital transformation platform. The rapid iteration of products has further improved the product power of the company, which can meet the diversified needs of customers of state-owned central enterprises, such as digitalization and integration, and new products are gradually expanding.
The scale of contracted users continues to expand, and the company is optimistic about the company's core competitiveness in the state-owned central enterprise market: in 2022, the number of central enterprise customers in the signing countries of H1 company has further increased, and the cloud service business has been continuously expanded in the high-end customer market. successfully signed contracts with China Energy Construction, China Power Construction, China Chemical and other central enterprises, the management software "Smart State-owned assets" has been 15 provincial-level SASAC, including Shandong, Hunan, Shaanxi and other provinces. 63 SASAC at the prefectural and municipal level provide information services for state-owned assets supervision, providing strong support and guarantee for digital and intelligent supervision. Under the background of the increasing demand for localization of ERP in state-owned enterprises, the company continues to develop new products to match customer demand, and its market share continues to increase. According to the 2021 China SaaS Market Research report released by CCID, Chaoyun ERP occupies the leading camp in China's SaaS market. The company has the background of state-owned enterprises and stable delivery capacity and product competitiveness, we are optimistic about the long-term development of the company in the customers of state-owned central enterprises.
Profit forecast and investment rating: due to the smooth progress of the company's customers in large state-owned central enterprises, we maintain the company's operating income of HK $51.00 billion in 2022-2024, the current market capitalization corresponds to 0.6 PS in 2022-2024, and maintains the "buy" rating.
Risk hint: the epidemic affects the progress of the project, and the process of digital transformation of state-owned enterprises is not as expected.