A leading provider of large security and industry information solutions, with continuous expansion of business areas

The company is the pioneer and leader of domestic middleware, based on the three product systems of "security +", "data +" and "wisdom +". It continues to be distributed in many fields, such as information technology application innovation, network information security, artificial intelligence, intelligent emergency, big data, 5G application, industrial Internet and so on. At present, the company serves more than 8000 enterprise users in telecommunications, government, finance, energy, transportation and other industries, and works with more than 3000 partners to create a win-win industrial ecology. From 2018 to 2021, the company's operating income CAGR reached 32.38%. In 2022, the company achieved operating income of 908 million yuan, an increase of 5.18% over the same period last year.

Digital China has been promoted in an all-round way, and there is a huge space for the information industry. Domestic middleware has ushered in a broad space during the 14th five-year Plan period, and informationization has entered a new stage of accelerating digital development and building a digital China. The information technology application and innovation industry has become a national strategy. According to the data of Ai Media Consulting, China's Xinchuang market will reach 1.66894 trillion yuan in 2022 and is expected to reach 3.70113 trillion yuan in 2027. At present, the Xinchuang system covers 28 areas, namely, eight important industries related to the national economy and people's livelihood, namely, the party, government and finance, electric power, telecommunications, oil, transportation, education, health care, aerospace, as well as N consumer markets. According to data from Ai Media Consulting, China's middleware market will be 10.88 billion yuan in 2022, an increase of 19.4% over the same period last year and will reach 16.78 billion yuan in 2025.

The market leadership position of middleware is stable, and the emerging business is accelerated. As an industry leader, the company vigorously promotes the technological innovation and market expansion of domestic middleware. According to the data of Jishi Information, the company took the lead in Chinese middleware products with a market share of 9.7% in 2021, and ranked first in the market scale of domestic basic middleware products with a share of 28.5% in 2021. Dongfang Tongxin, a subsidiary, focuses on the research and application of network security, information security and communication business security, and expands in new fields such as content security, artificial intelligence security, data security and so on. Taize Technology, a subsidiary, focuses on the field of intelligent emergency and urban safety, and has the ability to serialize products and services. In addition, the company is expected to gain a competitive position in the digital transformation market.

Profit forecast and investment suggestion

The company is the pioneer and leader of China's independent middleware, continues to expand in emerging fields in recent years, and has a broad space for growth in the future. It is predicted that the operating income of the company from 2023 to 2025 is 12.15,15.95 and 2.047 billion yuan, the net profit is 2.99,4.11 and 542 million yuan, the EPS is 0.53,0.73,0.96 yuan per share, and the corresponding PE is 37.27,27.10,20.57 times. With reference to the valuation level of the industry, 50 times the target PE in 2023 is given, corresponding to the target price of 26.50 yuan. Recommend for the first time, give a "buy" rating.

Risk hint

The risk of macroeconomic fluctuation; the risk of intensified competition in the industry; the risk of the loss of core technical personnel; the risk of technological research and development; the risk of impairment of goodwill; the risk of the stability of corporate control.