Foreword:
Since Galaxy Group joined Tianma in December 2016, extension mergers and acquisitions have been carried out smoothly, and management has been successfully changed. In this report, we've sorted out the key points of Tianma's strategic transformation to help you understand Tianma's transformation path.
Core views:
1) As the cloud computing+big data+artificial intelligence cluster of Galaxy Group, Tianma is a key part of the industrial Internet. Seize core customer resources through front-end, middle, and back-office SaaS software that has the most contact with customers and has the strongest stickiness; data collected through SaaS, plus external DaaS, seizes core big data resources; and outputs the business decision results desired by customers through commercial AI core algorithms. The entire system is both open and collaborative.
2) Relying on the strong strength of Galaxy Group to introduce high-quality resources. The actual controller of Galaxy Group, the majority shareholder, has more than 20 years of Internet entrepreneurship and investment experience; Galaxy Group has co-founded more than 100 well-known startups with strong strength, providing an important guarantee for Tianma to obtain high-quality external resources in the future.
3) Outreach acquired shares in Shanghai Weimeng and Boyi, and the cloud-based big data layout was improved. Weimob is one of the best service providers in Tencent's ecosystem. Tencent holds 2.14% of the shares and has settled in more than 2.2 million merchants. Boyi Co., Ltd. is a leader in the field of big data segmentation, and its big data application technology and modeling capabilities have been widely recognized by the market.
Valuation and earnings forecasts:
If further outreach is not taken into account, according to the performance commitments of the two companies already acquired by the company, and considering the divestment and merger factors of the bearing business, Tianma's net profit for the 17-19 exam preparation is estimated to be 140 million, 260 million, and 350 million yuan, and the corresponding EPS is 0.12, 0.22, and 0.30 yuan.
If the divestment and integration of the company's assets is considered, it is supported by the majority shareholders' direct investment project resources. Based on the target guidelines of the equity incentive plan, based on the valuation of 35 times PE of the company's 18-year performance commitment of 500 million (the SaaS industry's 2018E average PE is 37 times), the corresponding market value is 17.5 billion yuan, and the target price is 1,473 yuan, upgraded to the “Highly Recommended” rating.
Risk warning
Business development falls short of expectations; mergers and acquisitions integration falls short of expectations
