YONYOU NETWORK(600588)：LAUNCHES YONBIP V3;ENTERING NEW STAGE OF PRODUCT DEVELOPMENT

　　What's new
　　We attended Yonyou Network’s (Yonyou) 2022 Global Business Innovation Conference on August 26-27, 2022, at which the firm launched YonBIP V3, an upgraded version of Yonyou Business Innovation Platform (BIP). This new platform has made breakthroughs in technologies, application architectures, innovative services, and ecosystems, advancing Yonyou’s BIP to a new level of development characterized by advanced and large-scale application. We believe this also enhances the firm’s product competitiveness globally.
　　Comments
　　YonBIP V3 differs from previous products in five advanced technologies, six application architectures, 10 core areas, 465 innovative services. Yonyou iUAP is an open platform focusing on Platform as a Service (PaaS) that supports companies as they develop their Internet technology and architecture, and serves as the foundation for YonBIP. The firm upgraded five technologies including Yonyou’s YMS cloud middleware technology and self-developed multidimensional data engine. YonBIP V3 improves the installation and deployment efficiency 50%, cuts labor cost of operation and maintenance 90%, and improves the iteration efficiency of the private cloud by 100%.
　　We believe that the YonBIP V3 event-based accounting function is an innovation that integrates business & finance as well as accounting architecture. We think this new function helps the firm’s BIP to become a world-leading financial system product, enjoying global first-mover advantage over other enterprise application applications.
　　YonBIP V3 adds three new modules to its cloud application, namely, R&D cloud, project cloud, and asset cloud. Integrating the three along with the upgraded financial cloud, personnel cloud and other cloud platforms create a complete set of 10 Software as Service (SaaS) cloud modules. Meanwhile, YonBIP V3 provides 465 innovative services and continues to offer microservices to enterprises to its clients. Furthermore, Yonyou offers YonBuilder and YonLinker to empower the development and deployment of products through low-code and robotic process automation (RPA) technology for its enterprise clients.
　　YonBIP V3 marks a new stage of development for the firm’s BIP. We believe that the launch of YonBIP V3 marks a new stage of development for the firm’s BIP and marks a point where the product line is technologically mature and can be promoted on a large scale. After launching YonBIP V3, the firm plans to end sales of NC Cloud (NCC), the former ERP cloud product for developing large companies. Yonyou believes that the new version achieves 95% of functional granular coverage, improves the performance of the platform by 10 times, and cuts up to 70% of deployment demand. The firm hopes to offer a comprehensive range of its cloud product and services to large enterprises. The firm announced that clients using YonBIP V3 include industry leaders such as Hikvision, Chongqing China Tobacco, and China Southern Airlines. Yonyou is changing its NCC orders to YonBIP products, and the upgraded platform will come online for clients such as Walsin Lihwa. We believe the firm’s product iteration to YonBIP V3 will accelerate localization among large enterprises and further improve its market share.
　　Event-based accounting to help Yonyou establish new standards in the financial industry. This should improve Yonyou BIP’s global competitiveness as a software-service provider for enterprises. We are upbeat that the firm will make breakthroughs in services to domestic enterprises and grow into a global supplier offering digitalized and intelligent services to enterprises thanks to improving its products.
　　Financials and valuation
　　We maintain our 2022 and 2023 earnings forecasts. We maintain OUTPERFORM and SOTP-based TP of Rmb30, offering 50% upside. The stock is trading at 7x and 5x 2022e and 2023e P/S.
　　Risks
　　Disappointing delivery of projects for large enterprises; higher-than-expected R&D and selling expenses.
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。