Core views:
A comprehensive IT service provider that is deeply involved in the field of social security. The company is the only A-share listed company focusing on the social security and livelihood industry. In 2004, it became one of the largest social security card providers in China. As the third generation of social security cards began to be replaced at the end of 2021, the company entered a new period of growth. At the end of 2022, the company released an equity incentive plan. The performance target was high, and the exercise price was 16.78 yuan/share.
The operation of social security data element products can be expected, and it is expected that a double breakthrough in business model and market space will be achieved.
In the new era of the digital economy, China is actively promoting the construction of a data element market, and policy dividends have been released at an accelerated pace since the second half of 2022. The monetization of data element assets is divided into three stages: resourcification - commercialization - capitalization. (1) Data element resource stage: The data element resource process: the company is well recognized by the government, is naturally close to social security data, and has also accumulated a large number of livelihood data element assets; (2) Data element commercialization and asset link: The Bijie project is tested first, and the company already has business experience in developing data element products.
Starting from industrial logic, in the context of the continuous release of data element industry policy dividends, the company is based on its advantages in the social security field, combined with the data element product development and operation experience accumulated earlier in places such as Bijie, Guizhou, and is expected to be replicated in large quantities at the national level in the future, thus essentially upgrading the company's business model and opening up a wider business space.
Profit forecasts and investment recommendations. Considering that the company's business is currently in a period of rapid growth, we expect net profit to return to the mother in 2023-25 to reach 1.93/273/347 million yuan. Considering that the company's business is mainly aimed at the social sector, it is expected that developing data element products based on social business advantages will open up new space. You can select Jiuyuan Yinhai and Shandadiwei as comparable companies, giving the company a reasonable valuation of PE 50 times in 2023, corresponding to a reasonable value of 31.25 yuan/share, covering the “buy” rating for the first time.
Risk warning. The pace of third-generation card social security card exchanges fell short of expectations; the pace of advancement of data element products fell short of expectations; and the pace of development of traditional businesses such as the One Card fell short of expectations.