1
2021年05月31日-中国电信与媒体行业-中国SaaS：中国数字化转型和软件本地化的最佳剧本-84页.pdf
25墨值下载
Asia Pacific Equity Research
31 May 2021
This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of
Mainland China. This material or any portion hereof may not be reprinted, sold or redistribute
d without the written consent of J.P. Morgan.
China SaaS
Best play on China’s digital transformation and
software localization; Weimob and Ming Yuan Cloud
top picks
Telecoms and Media
Michelle Wei, CFA
AC
(852) 2800-8562
michelle.z.wei@jpmorgan.com
Bloomberg JPMA WEI <GO>
J.P. Morgan Securities (Asia Pacific) Limited/
J.P. Morgan Broking (Hong Kong) Limited
Alex Yao
(852) 2800-8535
alex.yao@jpmorgan.com
J.P. Morgan Securities (Asia Pacific) Limited/
J.P. Morgan Broking (Hong Kong) Limited
Allen Li
(86-21) 6106 6358
allen.f.li@jpmorgan.com
SAC Registration Number: S1730520030004
J.P. Morgan Securities (China) Company
Limited
Alvin Au
(852) 2800-8533
alvin.au@jpmorgan.com
J.P. Morgan Securities (Asia Pacific) Limited/
J.P. Morgan Broking (Hong Kong) Limited
Albert Hung
(886-2) 2725-9875
albert.hung@jpmchase.com
J.P. Morgan Securities (Taiwan) Limited/ J.P.
Morgan Securities (Asia Pacific) Limited/ J.P.
Morgan Broking (Hong Kong) Limited
See page 80 for analyst certification and important disclosures, including non
-
US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report
as only a single factor in
making their investment decision.
www.jpmorganmarkets.com
We initiate on six software stocks that adopt SaaS strategies, with OW ratings on
Weimob (2013 HK), Ming Yuan Cloud (909 HK), Beijing Kingsoft Office
Software (KOS, 688111 CH), Glodon (002410 CH), and N ratings on Yonyou
(600588 CH) and Kingdee (268 HK). We believe these companies are the best
plays on China’s digital transformation, software localization and SaaS prosperity
themes, and benefit from a favorable regulatory environment. The software
industry, especially SaaS, provides investors with good exposure to the secular
digital transformation trend in China, where software spending could potentially
increase by 11x if China’s spending as a percentage of GDP catches up to U.S.
levels. We think China’s SaaS market is a long-term structural growth
opportunity, and estimate sector revenue will grow 7x between 2019 and 2025E.
A US$1 trillion market in the making, where many ‘multi-bagger’
investment opportunities are likely to unfold: Applying a P/S multiple of
15x-25x (U.S. SaaS universe’s average EV/S = 16x), we estimate China’s
enterprise SaaS market could be potentially valued at US$0.6-1tn in 2025. We
expect the SaaS market to present a large number of investment opportunities
that could be ‘multi-baggers’ over the next five years. Within our coverage,
Glodon, Yonyou and Kingdee’s share prices have increased by 3x-9x since
2017, and Weimob and KOS have rallied 5x-7x since their IPOs in 2019. We
attribute the share price outperformance to good execution of cloud
transformation strategies, strong revenue and earnings growth, and fund flow to
new economy stocks last year. We expect fast SaaS business growth to remain a
key catalyst in the future, driven by growing demand of Chinese corporates for
digital transformation, rising inclination to use domestic software products and
increasing acceptance of cloud-based service.
2021 might be a challenging year for growth stocks; be selective: Although
we believe fundamentals of the six software stocks remain solid, macro-driven
style rotation will likely continue to be an overhang for the space in the near
future. We recommend four stocks, in the pecking order of Weimob (a good
play on fast-growing decentralized commerce, moving up-market strategy,
relatively attractive valuations) > Ming Yuan Cloud (established relationships
with premier customers, synergies between SaaS and legacy business) > KOS
(key beneficiary from software localization) > Glodon (market dominance, new
business potential not priced in). We suggest investors stay Neutral on
Kingdee and Yonyou given the challenges they might face with promoting the
SaaS service to large enterprises and potentially deteriorating profitability.
Valuation framework and risks: We adopt SOTP as our main valuation
methodology given the different revenue growth and margin profiles of these
companies’ SaaS and legacy businesses. We value the SaaS operation on a range
of 16x-32x P/S, and non-SaaS on 10x-45x P/E. Key risks include potentially
intensifying competition, large enterprises’ reluctance to adopt cloud service (a
risk for Yonyou and Kingdee in particular), high churns of small-sized
enterprises (Weimob), and profitability pressure resulting from new business
development (Weimob, Yonyou and Kingdee).
Company RatingPT (LC)Upside Type Report
Weimob OW 22.0 28% Vertical Link
Ming Yuan
Cloud
OW 50.0 25% Vertical Link
Kingsoft Office OW 460.0 23%
Horizontal
Link
Glodon OW 89.0 20% Vertical Link
Yonyou N 41.0 13%
Horizontal
Link
Kingdee N 31.0 5%
Horizontal
Link
Source: Bloomberg Finance L.P. and J.P. Morgan.
Priced at close of 28 May 2021.
2
Asia Pacific
Equity Research
31 May 2021
Michelle Wei, CFA
(852) 2800-8562
michelle.z.wei@jpmorgan.com
Table of Contents
Summary of China software coverage ...................................3
Executive summary..................................................................4
China SaaS: A US$1trillion market value in the making...........................................4
Stock views and valuations......................................................................................6
Risks.....................................................................................................................11
Valuation comp tables...........................................................................................11
Sub-market discussions ........................................................15
Horizontal SaaS vs Vertical SaaS ..........................................................................15
Real Estate............................................................................................................17
Enterprise Resource Planning (ERP)......................................................................24
Construction..........................................................................................................30
Decentralized Commerce.......................................................................................36
Office Software.....................................................................................................41
Promising SaaS adoption in China .......................................45
Sizing China’s SaaS market...................................................................................45
Enterprise SaaS market to reach Rmb260bn in 2025E............................................45
A diverse and fragmented market ..........................................................................46
Driver 1: Public cloud deployment gaining increasing acceptance ..........................47
Driver 2: Robust cloud and internet infrastructure as a solid foundation..................48
Driver 3: Significant potential in SMEs, which are well suited for SaaS .................49
Driver 4: COVID-19 boosts cloud-based service adoption......................................50
Challenges to SaaS adoption in China....................................................................50
Internet giants building SaaS ecosystems ...............................................................51
U.S. case study – Successful SaaS transition rewards financials and share prices....56
A snapshot of private companies .........................................59
China’s software industry presents great potential ............66
China has been under-digitalized ...........................................................................66
Strong government support for digital transformation ............................................68
Rising demand for software services amid rapidly rising labor costs.......................71
Software localization benefits domestic players .....................................................71
Appendix: China vs the U.S...................................................75
Appendix: Basics of SaaS .....................................................77
On-demand SaaS model vs traditional on-premise software model .........................77
SaaS vs IaaS/PaaS.................................................................................................78
Pros and cons of SaaS: Customer point of view......................................................79
Pros and cons of SaaS: Vendor point of view.........................................................79
of 84
25墨值下载
【版权声明】本文为墨天轮用户原创内容，转载时必须标注文档的来源（墨天轮），文档链接，文档作者等基本信息，否则作者和墨天轮有权追究责任。如果您发现墨天轮中有涉嫌抄袭或者侵权的内容，欢迎发送邮件至：contact@modb.pro进行举报，并提供相关证据，一经查实，墨天轮将立刻删除相关内容。
下载排行榜
文档被以下合辑收录
评论