Weishijiajie is the leading technology product solution and supply chain service platform in the Asia-Pacific region. The net profit of 1H20 went against the market and reached a record high under the pandemic, the business structure was more optimized, and the business layout transformation related to cloud computing was actively carried out.
Maintaining close cooperative relationships with many well-known upstream brand manufacturers, the company that will continue to enrich its product portfolio in the future is a leading IT product distributor in the Asia-Pacific region and has established long-term stable cooperative relationships with more than 300 well-known upstream IT brand manufacturers. We believe that in the future, the company will continue to maintain stable cooperative relationships with existing upstream brands, and can continue to expand partner brands and continue to enrich the product portfolio.
Seizing the growth of segmented categories, the consumer electronics division has an opportunistic product portfolio in multiple categories, which reduces the company's reliance on sales of a single product or category, and gives the company an opportunity to enjoy market growth in the segment. For example, in 17-19, while global smartphone and personal computing device shipments continued to decline, the company's consumer electronics division's revenue continued to grow, which is believed to be due to (1) growth in some product segments to make up for the decline in some products; and (2) an increase in market share. We believe mobile phones, wearables, drones, 3D printers, etc. are expected to bring growth opportunities to the company.
Big data drives the upgrading of cloud computing demand. The enterprise system+cloud computing business segment is a future growth point. As the 5G process accelerates, further improvements in network transmission speed will accelerate the increase in massive data. It will place higher demands on the computing capacity, storage space, etc. of cloud computing. It is expected to support the continued rapid development of basic cloud services, which in turn will drive an increase in hardware demand for databases, storage and other hardware required for construction, and support the revenue growth of the company's enterprise systems division. It is expected that with the development of 5G, cloud computing, AI and technology integration, the digital transformation of enterprises will accelerate. Furthermore, the experience of some production and offices not being able to be completed offline during the COVID-19 pandemic has heightened companies' understanding of going to the cloud. It is expected that some enterprises may plan to go to the cloud earlier. Although enterprises that are more affected by the pandemic may reduce short-term IT expenses, they will include going to the cloud in their plans, which is expected to support the rapid growth of the company's cloud computing business segment over the long term.
The distribution network covers many Southeast Asian regions, and companies with regional differentiation advantages in distribution channels cover more than 50,000 downstream channel partners. In addition to China, they are also actively expanding in 8 Southeast Asian countries. Shenzhou Digital (000034 SZ), which is also a leading IT product distribution company, covers about 30,000 channels. Apart from China, it mainly develops in Singapore and Malaysia. In comparison, the company has regional differentiation advantages in distribution channels.
Excellent operation and management capabilities, net profit bucked the trend and reached a new high
Although the distribution industry has the characteristics of low gross profit margins and net interest rates, the company's main financial data showed a positive trend thanks to excellent operation management. As 2H20 is less affected by the pandemic and may cooperate with leading Chinese power battery manufacturer Ningde Times (300750 SH) in the field of lithium-ion batteries, we are confident in the company's development.
ROE is leading the industry, and there is room for improvement in valuation. It is recommended to pay attention
We compare the company with Shenzhou Digital, an A-share listed company that is also a leading IT product distribution company, and consider the A/H share premium factor. We believe that the valuation gap between the company and Shenzhou Digital is too large. With the rapid development of cloud business and future opportunities to expand into more business fields (such as lithium batteries), the valuation is expected to increase. We recommend paying attention.