UFIDA (600588): Profit Growth Exceeds Expectations Cloud Transformation Challenge Has Arrived

UFIDA (600588): Profit Growth Exceeds Expectations Cloud Transformation Challenge Has Arrived

Interim data and major financial data analysis companies achieved operating income in the first half of 201933.

1.3 billion, an increase of 10 in ten years.

2%; net profit attributable to parent company4.

8.2 billion, an annual increase of 290.

1%; net profit after deduction is returned to the mother 2.

6.4 billion, an increase of 155 in ten years.

1%.

Business spin-off: Traditional software business achieved operating income22.

4.8 billion, an increase of 5% over the same period; cloud service business (excluding financial cloud service business) achieved operating income4.

7.2 billion, an increase of 114 in ten years.

6%.

In addition to research and development expenses, the remaining three expenses of the company, both in absolute terms and in terms of revenue, fell compared to the same period last year. We analyze the company’s full development of the cloud business. The reduction of resources investment in all aspects of the traditional software business has shrunk, which further brings related expenses.decline.

Net cash flow from operating activities was -3.

2.2 billion, -0 in the same period last year.

3.6 billion, the bonus paid to employees in the current period, the amount of increased spending.

The surplus of funds received in advance at the end of the period was 11.

3.5 billion, beginning at 10.

800 million, of which the company’s cloud service business received advance payments4.

400 million, an increase of 46% over the beginning of the year.

Cloud business revenue grew at a high speed, the focus of resource investment shifted to cloud business. Cloud business revenue continued to grow at a high speed, and the growth rate of cloud business exceeded market expectations.

The growth rate of traditional software revenue has clearly increased. We believe that the macro economy will have an impact on the traditional ERP market. At the same time, we believe that leading ERP vendors are shifting their resources to the cloud business, whether UF Cloud’s NC Cloud or KingdeeFor Kingdee Cloud Sky, its main customer bases overlap with their traditional dominant customer bases, and the trade-offs in resource allocation must occur. This also means that the critical period for cloud transformation has arrived. In the process of the transformation of new and old business models,The deployment mode and business model of cloud business reflect whether the full implementation will determine the success or failure of cloud transformation.

As a domestic 成都桑拿网 ERP leader, we continue to be optimistic about the market potential of the industry’s development and restructuring of leading manufacturers. At the same time, we should also see that data such as the renewal rate are further improved by the world’s top SaaS manufacturers.

Regarding cloud ERP, we believe that the core difference between “cloud ERP” and “traditional ERP” lies in the change of “business model” and “deployment mode”. The two points determine the “potential” for software vendors.The changes in market demand “changes” and “financial statements” have a long-term impact on their corresponding estimation methods.

The company’s 2019 EPS is expected to be 0.

36 yuan / share, based on the latest closing price, the PE in the next three years will be 87, 72, and 59 times.

As the leading manufacturer of active cloud transformation, the company’s cloud revenue share will further increase. Based on the company’s historical forecast level, we give the company a 90-year PE valuation in 19, which is equivalent to a reasonable value of 32.

4 yuan / share, maintaining the “overweight” rating.

Risk warnings: Cloud transformation is not up to expectations; cloud ERP products are still to be verified by the market; current estimates are not superior to the industry level; environmental risks of financial information services; current contract renewal rate data is not ideal.