Real estate ecological chain SaaS leader, fully covering residential, industrial and infrastructure development / operation / services. Ming Yuan Cloud Group was founded in 2003 (its predecessor company was founded in 1997) and listed on the main board of the Hong Kong Stock Exchange (0909.HK) in 2020. The development of the company has gone through four stages: starting with property management software in 1997; building ERP solution in 2006; launching cloud guest and cloud procurement products in 2014 to achieve the transition to SaaS service model; and launching Skyline PaaS platform in 2020. The company takes Skyline PaaS platform as the technical base to build cloud customer, cloud procurement, cloud space, cloud chain product matrix, covering customer relationship management, asset management and operation, project construction three major business lines. From 2021 to now, the real estate industry has entered a difficult stage. under this background, the company has accelerated from the residential real estate market to the industrial and infrastructure non-residential real estate market. at the same time, accelerate from the incremental development market to the stock asset management, operation and service market, to achieve the company's comprehensive coverage of the residential, industrial and infrastructure markets in the areas of incremental and stock business.
Create SaaS product matrix to achieve PLG growth model.
(1) Yunke focuses on the field of customer relationship management (CRM), and its utility is recognized by large customers. According to the prospectus, Yunke is the number one tool for new home sales and marketing and sales office management for real estate developers in China according to 2019 income and the number of real estate sales offices served.
(2) Cloud chain focuses on the field of project construction, and there is much room for improvement in permeability. From 2018 to 2022, the number of construction sites supporting cloud chain increased from 1100 to 7150. According to the data of the National Bureau of Statistics, the total number of construction enterprises in China has reached 129000, of which the number of special and first-class construction enterprises has reached 16000. Nearly 500000 construction sites are under construction.
(3) Cloud procurement: focus on supply chain management, platform activity continues to improve. From 2020 to 2022, the number of cloud purchasing real estate developers increased from 2000 to 4400, and the number of suppliers increased from 60000 to 99000.
(4) Cloud space: focus on asset management and have a broad market space for state-owned assets. From 2019 to 2022, the company's cloud space business income was 26.54 million yuan, 38.24 million yuan, 53.24 million yuan and 61.52 million yuan respectively, with an annual CAGR of 41.6%. Policies related to liquidation and revitalization have been issued intensively. State-owned enterprises at all levels currently hold about 300 trillion of the stock assets, and there is a strong demand for digital asset management in the departments of state-owned enterprises.
Skyline PaaS platform increases the product thickness and technical complexity, and has a broad space for commercialization. The Skyline PaaS platform integrates five sets of functions: development kit (aPaaS), integration suite (iPaaS), process suite (bpmPaaS), data suite (BI&Big Data) and super workbench suite (BPA&Portal). Skyline PaaS platform achieves efficient coordination of internal SaaS products, including Yunke, cloud chain, cloud space and other products, and involves various functional modules such as sales, cost, planning, acquisition, fee, economic division, and so on, which is conducive to product cross-selling. At present, Skyline PaaS platform has more than 1500 partners, more than 1200 zero code developers, and links more than 50 technical partners. The huge developer ecology of Skyline PaaS platform helps to reduce the marginal operating costs of platform development and achieve economies of scale. The revenue of the Skyline PaaS platform was 19 million yuan in 2021 and 204 million yuan in 2022, an increase of 970.4 percent over the same period last year, serving more than 1900 customers.
At present, the company promotes data suite + data governance, development suite + extended customization, integration suite + third-party integrated innovative services and applications, together with Huawei Cloud, China soft International and regional partners, continue to promote the commercialization of the Skyline PaaS platform.
With the establishment of a national sales network, the industry trough and regional channels are still stable. The company's sales network is set up according to geographical area, covering 30 + provinces, municipalities and autonomous regions across the country, and is composed of direct sales teams and regional channel partners, among which first-tier cities (including Beijing, Shanghai, Shenzhen and Guangzhou) are sold directly by the company's sales team, while other regions sell and deliver SaaS products and ERP solutions to customers through regional channel partners. Regional channel sales performance is outstanding. From 2017 to 2022, the sales revenue of regional channels increased from 186 million yuan to 945 million yuan, with an annual CAGR of 38.4%. From 2021 to 2022, although the real estate industry was at a low ebb and the company's business was affected, the commission proportion of SaaS products given by the company to the channel was still stable, thus the two sides maintained a solid cooperative relationship and encouraged the sales channel network to fully sell and serve the company's product line.
Investment advice: at present, the attitude of regulators towards real estate enterprises has changed fundamentally, and the industry has gradually picked up and stabilized. The company actively adjusts its operating strategy. On the one hand, it speeds up the expansion of ╱ infrastructure and other industrial markets dominated by state-owned enterprises, and launches new products and solutions; on the other hand, it reduces costs and improves efficiency, and promotes the optimization of organization and talent structure. We expect the company's revenue from 2023 to 2025 to be 1.986, 2.388, and 2.861 billion yuan respectively, giving the company a "highly recommended" rating of 4X PS in 2023, corresponding to a market capitalization of 7.9 billion yuan (HK $8.7 billion).
Risk tips: the recovery of the real estate industry is not as expected, the R & D investment of Skyline PaaS platform is increased, the process of product commercialization is not as expected, regional sales channels are unstable, and so on.