Edited by Haitong: summary of 18-year Mid-term report of computer Industry and Research Framework of September 2018: software and hardware, Prosperity and valuation
Haitong pointed out that the computer industry hardware sector reported excellent revenue growth in 2018, while the software sector maintained high growth. In the first half of 2018, the revenue of the computer industry as a whole reached 162.8 billion yuan, an increase of 28.5 percent over the same period last year, and the net profit returned to the home was 14 billion yuan, an increase of 21.8 percent over the same period last year.
The computer hardware sector maintained a good growth trend in the first half of 2018, with a total revenue of 69 billion yuan, a year-on-year increase of 44.3% and a growth rate of 34.1% in the first half of 2017; the software sector had revenue of 25.6 billion yuan, a growth rate of 24.3%, although the growth rate declined slightly, but the overall growth rate in the past three years remained at a high level, and the demand for software and information technology remained strong.
In order to compare the prosperity of different segments of the computer industry, Haitong classified and classified the sample companies according to their main business. Compared with the overall net profit growth rate of 21.8% in the first half of 2018, it can be found that the enterprise software sector has the highest net profit growth rate, mainly due to a turnround in the first half of 2018 compared with the same period last year. If the user network is excluded, the overall growth rate is 54%. The growth rate of industrial software remains at a high level, on the one hand, the prosperity of downstream steel and other industries has rebounded, while the post-cyclical attribute of IT investment makes the industry as a whole to maintain a high growth rate; on the other hand, intelligent manufacturing already has the basis for the outbreak, the current stage is digital and automatic transformation, and the rapid development of industrial software is inevitable.
Cloud computing infrastructure performance is highly deterministic, in software definition and distributed systems, servers and storage serve as the most basic unit modules, and their demand increases. Haitong believes that in the short and medium term, the field of cloud computing hardware and infrastructure has explosive performance, while the cloud of software companies is a major trend in the long run, bringing about changes in profit models and the improvement of customer coverage and ARPU values under user stickiness. Smart city, intelligent security, financial IT, medical information plate growth rate is also higher than the overall average level of the industry. Under the digital China strategy, local governments have increased their investment in smart cities and intelligent security. In addition, the acceleration of the Internet in the medical field, the new regulations of capital management and the general trend of banking reform have increased the investment in IT in related sub-areas.
By the end of August 2018, the price-to-earnings ratio (TTM) of the computer industry was 47.8 times, below the historical average since 2006 and below the historical median price-to-earnings ratio of 49.4 times. Haitong believes that there is room for improvement in some areas with long-term growth logic and high prosperity, such as cloud computing, financial IT, enterprise software, intelligent security, information security / autonomous control and other areas.
According to the configuration data of public offering funds in the second quarter of 2018, computer positions continued to rise to 4.37%. The size of positions and the concentration of individual stocks rise simultaneously, and they obviously prefer the field of cloud computing operators. Haitong pointed out that from the perspective of fund heavy stocks, PE valuation is not the point that institutions are most concerned about. Haitong believes that the current institutions pay more attention to the company's long-term growth logic, and the five companies with heavy positions in the second quarter are all related to cloud computing. The cloud makes computer companies more sustainable in terms of cash flow, from doing projects to collecting annual service fees. In addition, the cash flow of product companies tends to be relatively good.
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