Northeast Securities released a research report stating that it covered Easy Point Cloud (02416) for the first time and gave it a “buy” rating. The bank expects that in this economic cycle, more and more small and medium-sized enterprises will improve the company's resilience to risks through the model of leasing equipment from office equipment suppliers, and the company's performance is expected to continue to grow. The company's operating income for 2024-2026 is 1.336/1.604/2.13 billion yuan, respectively, and the net profit to the mother is 0.047/0.148/0.267 billion yuan.

The main points of the report are as follows:

The company is an office cloud service enterprise that provides comprehensive IT solutions and other services for the pay-as-you-go office.

The company mainly provides comprehensive office IT solutions and develops various products to meet the diverse needs of customers through the pay-as-you-go subscription model. This model provides customers with hardware, SaaS software, and processing equipment configuration, equipment/engineer deployment, operation and maintenance support, performance optimization, and equipment management services (including equipment ordering, subscription management, on-site inspection and batch delivery), all included in a service package. Customers can flexibly subscribe or unsubscribe to office IT services according to changing needs. It can help customers maximize the stable operation time of office IT, save operating expenses, improve employee productivity, and drive business growth. The SaaS product Easy Inventory is designed to help enterprise customers manage assets and inventory from asset procurement and storage to use and disposal, and collect annual subscription fees. As of the first half of 2024, the number of active customers of the company reached 49,737, up 10.4% year on year. The customer retention rate remained high, the same as the same period last year; the number of service equipment was close to 1.33 million units, up 15.6% year on year.

Continuously iterate the product hierarchy to meet the needs of small and medium-sized customers.

Under economic pressure, the demand for office IT equipment from small and medium-sized enterprises is shifting to lower-cost equipment, so the company developed and launched the Easypoint Cloud A101 in advance in response to macroeconomic impacts and changes in customer demand. With its simple appearance and leading performance, the product meets the IT needs of ordinary jobs in small and medium-sized enterprises, while drastically reducing monthly subscription fees. Thanks to the combined effects of new product launches and more effective sales strategies, the number of subscriptions per customer for old customers increased from 28 units/customer to 29 units/customer, and the number of subscriptions per customer for new customers increased from 15 units/customer to 17 units/customer. As a result, the company achieved a net increase of about 0.125 million units in the first half of 2023. Compared with -0.055 million units in the first half of 2023, the company returned to the growth trajectory.

Continue to deepen the AI field and work with Microsoft to develop new hardware products.

On February 22, 2024, the company announced that it had reached a strategic cooperation with Beijing Cigna Times Technology Development Co., Ltd., an authorized dealer of Microsoft in China, and has taken solid steps in the field of AI. The line is based on Microsoft Azure

OpenAI

GPT products, through technological expansion and upgrading, have created Yizhihui products that are more suitable for small and medium-sized enterprises. The bank believes that as the company continues to be deeply involved in the AI field, it is expected to rely on corporate office IT subscriptions to deeply connect about 0.05 million households and more potential SME customers in the future to help SMEs establish their own AI capabilities and better serve the broad enterprise service market.

Risk warning: The company's business development falls short of expectations, and profit forecasts fall short of expectations.