Nantian Information is the leader of IT, the established bank, and the only IT A-share listed company in Yunnan Province. When the company went public in 1999, it took the lead in hardware share in the country. In 2014, the company's OFPCoreBankingV5.5 system was successfully implemented in large state-owned banks, and the company sold Pharmaceutical in 2018. The company will focus on the main business and implement the first phase of the employee stock ownership plan (the average price is 11.21 yuan). The company is expected to fully benefit from the high prosperity of the bank IT market with the ability of software and hardware + integrated-body service. From 2020 to 2023, the prosperity of bank IT is expected to improve, and the leading IT manufacturers are expected to fully benefit. In 2018, the market size of Bank of China Ltd. IT reached 11.68 billion yuan (year-on-year + 10.1%), of which the overall solution was 41.99 billion yuan (year-on-year + 23.6%). Since the CBRC issued a document in 2018 requiring banks to reach an overall proportion of no less than 75% in 2019, domestic innovation support policies for banks followed one after another in 2019, and large state-owned commercial banks increased their investment in IT. We judge that the prosperity of the bank IT market is expected to improve from 2020 to 2023, and the company, as one of the few manufacturers that can provide core systems, is expected to grow faster than the industry average.
As a platform for the implementation of the digital Yunnan strategy, Nantian Information is expected to benefit significantly in conjunction with China Electronics and Singapore's Keppel. The Yunnan Provincial Government issued the "Digital Yunnan" three-year Action Plan for the Construction of Information and Communication Infrastructure (2019-2021) in November 2019, requiring that by the end of 2021, the province should have 232000 4G base stations, 56000 5G base stations and 32000 IDC service racks. In January 2020, Yunnan Industrial Control Group, a major shareholder of Nantian Information, said at a working meeting that it would take Nantian Information as a platform, join hands with China Electronics and Singapore Keppel to jointly promote the landing of the digital Yunnan strategy. Nantian information software and hardware and integration revenue is expected to increase significantly, or have the opportunity to expand new profit growth points.
Profit Forecast: the estimated return net profit in 2019-21 is 0.36max 0.75 / 150 million yuan, corresponding to 109Compact 52max 26x Picture E in 2020-21 comparable to the company's average P pound E is 43max 33x. We believe that the company's income, the number of employees, customer coverage indicators are in the forefront of the industry, profit margins are expected to increase year by year, so we use Pamp S valuation method. Refer to China Information 2020 Wind consensus forecast P/S1.4x, give Nantian Information 2020 1.4-1.5x target Pmax S, corresponding to target market capitalization 57-6.1 billion, target price 17.76-19.03 yuan.
Risk tips: the release of orders is not as expected, the process of digital Yunnan is not as expected, competition is intensified, and so on.