designandinfrastructuremanagement.Glodonpositionsitselfasan
designandinfrastructuremanagement.Glodonpositionsitselfasan
IndustryPlatforminthe9
th
Three-yearPlan.Thecompanywillexpandits
productofferingsalongtheconstructionsupplychainwithfocusesin1)Digital
ConstructionPlatform,2)Infrastructureconstructionmanagementand3)
DigitalDesignproducts.
ExpandingfromSaaStoPaaS.Glodontargetstobuildasoftware
ecosystembylaunchingDigitalConstructionPlatform(PaaS)thisyear.The
companywillfocusonthreecoreSaaSproductsincludingDigitalDesign,
ZebraProgressandConstructionCostingwhileallowingISVstodevelop
nicheapplicationsforsub-verticalsbasedonPaaS.Forlargeenterprises,
PaaSwillbesoldasanewproductasitallowstheseenterprisestoeasily
customizeapplicationswiththesoftwaretools.
Clearerproductplanforinfrastructureconstructionmanagement.China
constructioncompaniesfacepainpoints,including1)highutilityusageand2)
lowprofitability,ininfrastructureconstructionduetopoorprojectmanagement.
Glodonhaslaunchedconstructionmanagementsolutionsspecifically
targetinginfrastructure(firststage:road/high-ways).In2022,Glodonexpects
newlysignedcontractsamounttoRMB400mn(tripleYoY).Regarding
profitabilitytimeline,managementisconfidentthattheconstruction
managementsegmentwillturnprofitablein2023-2024.Forexisting
constructionmanagementcontracts,30%isrelatedtoGlodon’sproprietary
softwareand70%isrelatedtohardwaresales.Blendedgrossmargin
exceeds60%althoughsmartconstructionbusinessmarginislowerat50%.
MaintainBUY.WekeepourFY22-24Eearningsforecast.MaintainBUYwith
unchangedtargetpriceofRMB72.03.