Key points of investment
The company is China's leading innovative fintech company:
Marco Digital Technology Holdings Co., Ltd. is a leading innovative fintech company in China.
The company mainly consists of five segments: insurtech providers with innovative solutions for the insurance industry based on digital yuan; digital platforms based on digital equity scenarios; smart cities based on artificial intelligence and cloud computing technology; digital yuan solution providers; and optical retailers operating in Malaysia.
In line with the general trend of developing digital yuan, business development has natural advantages:
The digital yuan has drastically reduced costs such as issuance and exchange. Once the digital yuan account system is established and formed once, it can greatly reduce the high costs of issuing and exchanging cash. In the future, there will only be operation and maintenance costs corresponding to the digital yuan system, which will be marginally reduced year by year until they are close to zero, and support T+0 settlement. Therefore, for the B-side of large capital transactions, the use of digital yuan will be able to effectively reduce their costs, which is an inevitable evolutionary trend in the future industry.
The subsidiary has accumulated extensive technology and will use insurance payments as an entry point:
The future business development scenario of China Insurance Science and Technology Innovation will revolve around the core pain points of the digital yuan and insurance industry. If the company can successfully obtain a digital yuan payment license, China Insurance Science and Technology Innovation will continue to make efforts to empower insurance companies and related partners with digital yuan technology, providing a full chain of digital renminbi-based payment and settlement services, smart contract services, and dual-chain integrated financial services. There is huge room for future growth.
The initial coverage gave the purchase rating:
We believe that the company's revenue scale is growing rapidly. At the same time, once the digital yuan business opens, the revenue growth ceiling will be huge. The company is an asset-light operating model, and the scale effect can continue to be reflected. Assuming that the company successfully applies for the insurance company's digital yuan smart contract, then a higher valuation premium should be given. We gave the company a target price of HK$45.0, which covered and gave a purchase rating for the first time, corresponding to about 25 times PE for fiscal year 2025.