Core logic
The company is China's Xinchuang and digital government "national team", digital business will significantly benefit from the accelerated landing of national policies. At the same time, the core database, OA, operating system and other products have obvious competitive advantages, under the general trend of localization, or welcome the valuation reconstruction.
Government Yunhe Xinchuang "national team" and "one body and two wings" strategic upgrading company is the core platform of China Telecom's Internet information industry and the "national team" in the field of digital government affairs and Xinchuang in China. It has undertaken the overall design and engineering construction of major information systems in many countries. Since listing, the company has actively built a core product system around Xinchuang, and continued to increase technology investment, while maintaining steady growth in performance. In 2021, the company will establish a new digital strategy and will seize new historical opportunities.
Digital government business: with a solid foundation, optimization and transformation, the policy accelerates the company's obvious advantages in China's digital government, government cloud and other fields, benefiting from the collection of Xinchuang industry, Anke business has become the company's main growth engine in recent years. At the same time, the company actively promotes model innovation, embracing cloud and data services, industrial Internet and other new models, and the business structure continues to improve. Looking forward to the 14th five-year Plan, the policy of "National Integrated Government Affairs big data system" will be landed, the party, government and industry will start more widely, and the industry will accelerate its prosperity, thus driving the rapid growth of the company's business.
Xinchuang core software: the two instruments are born with a comprehensive layout, and the valuation reshaping company has formed its own product system, including Jinkang database, Huidian office software, Kingdee middleware and Puhua operating system. Among them, (1) Jincang database is the earliest domestic database enterprise established in China, with a share of more than 50% of the party and government, an average share of 75% of the "three barrels of oil", a cumulative installation of more than 1 million sets, the core relational database products iterated to KingbaseES V9, and constantly innovate and improve the product matrix, ushering in the historical opportunity of "digitization + localization".
(2) Wisdom OA has a substantial lead in the market share of the party, government and large enterprises, with a market share of 65% of enterprises directly under the State-owned assets Supervision and Administration Commission, comprehensive coverage of financial head customers, firmly ranking among the top three in the market share of traditional deployment of domestic office software, and actively promoting the adaptation of Xinchuang.
(3) Puhua basic software is an important platform of basic software under CETC. Puhua operating system takes the lead in the market of Linux operating system in China, focusing on Shenwei chip ecology and opening up the market quickly. Puhua Automotive basic Software is a senior partner of AUTOSAR, with an installed capacity of more than 10 million sets and a "neutral" role positioning, which will benefit from the trend of automobile electrification, intelligence and cross-domain integration.
Investment suggestion
The company will significantly benefit from the construction of Xinchuang and national integrated government affairs big data system, as well as the promotion of the company's product and operation strategy. It is estimated that the company's revenue from 2022 to 2024 will be 121.36 pound 142.91 billion, EPS 0.78, 1.00 and closing price 27.77 on November 14, 2022, respectively, corresponding to PE 35.73, 27.66 and 20.50 times, respectively.
Risk hint
Macroeconomic decline, policy landing is not as expected, market competition intensifies, and so on.