IQ’s barter sublicensing revenues are so inflated that they wouldn’t...
2020-03-23 23 ENGLISH REPORTS
Among our coverage, Yonyou has strong base in medium and large clients, thus robust against macro uncertainties. Yonyou’s subsidiary Chanjet sees higher demand from SME migrating to cloud. The benefit from stronger demand outweighs the company’s client survival concerns, as new cloud products integrating commerce/financial functions continue to be launched. Besides, Chanjet has more clients consumer staples sector than in catering and tourism sectors, to make it less affected by the virus outbreak. Kingdee expects growing demand for digitalisation and accelerating habit formation of client adopting cloud service as a result of coronavirus epidemic. However, the SME client survival risks Kingdee faces are more of a concern as it has a greater percentage and wider range of SME clients. For a longer term demand from WFH, IT consulting/outsourcing firm Chinasoft could benefit from (1) more cloud migration/digitalisation demands, with its base of large client also robust against macro uncertainties, and (2) continuing fast growth in cloud business, with upside from its OA collaboration with Huawei WeLink.
IaaS helps enterprises not only eliminate capital expenditure and reduce subsequent costs, but also improve business continuity and disaster recovery and enhance stability, reliability and support with more security. The virus outbreak has interrupted the pace of work resumption post CNY, and forced many businesses to either stay shut or have employees work from home. The WFH apps such as Wechat Enterprise and Dingtalk experienced sudden spike in demand, which boosted customer acquisition at an extremely low cost in February. Meanwhile, many business owners started to realize the importance of cloud computing and virtualisation, which would accelerate the cloud adoption in our view by more enterprises, small and large scale inclusive. This would benefit the cloud operators including Alibaba (43% of market share), Tencent and Huawei, as well as smaller IaaS operators such as Kingsoft Cloud and UCloud as a back-up. We also noted the demand of CDN (content delivery network) would increase on WFH, as the bandwidth is needed to reserve and allocate for the OA applications to ensure the seamless connectivity. The independent CDN player Wangsu will benefit from increased traffic flow from online gaming/live streaming, the flow increase from OA/online education is positive but relatively smaller. Sustainability of the traffic flow will depend on the epidemic cycle.
标签： ENGLISH REPORTS