Key points of investment

Fixed increase content:

On August 24, the company issued an announcement stating that it intends to issue the number of A-shares not exceeding 30% of the company's total share capital before issuance to no more than 35 (inclusive) specific investors, that is, no more than 341 million shares (including the number of shares), and that the issue price is not less than 80% of the company's average stock price for the 20 trading days before the pricing benchmark date.

It is proposed to raise no more than 3 billion yuan for the following purposes: operational cloud projects, with a total investment of about 1,356 million yuan, to raise 800 million yuan; distributed storage R&D projects, with a total investment of about 534 million yuan, to raise 300 million yuan; the first phase of the China e-Cloud R&D base project, with a total investment of about 460 million yuan, to raise 400 million yuan; high-tech industrial engineering projects, with a total investment of about 4.155 billion yuan, to raise 900 million yuan; supplementary working capital or repayment of bank loans of about 600 million yuan.

Build an intelligent computing center and build a platform for basic computing power

The company promotes digital and information service business according to the “1+1+N” layout, and helps the digital transformation of thousands of industries with a digital foundation and data innovation. Among them, “N” means investing in the construction of N trusted intelligent computing centers in response to industry needs.

As one of the three-tier product structures of the “China Electronic Cloud”, the basic computing power platform product has now been created, including exclusive cloud CECSTACK, hyperconverged CeaCube, container cloud CEAke, cloud native distributed storage CeaStor, and cloud native security CEASec.

“Electronic Cloud” helps cloud number integration and leads China's Xinchuang Cloud

“China E-Cloud” is the leader of China's IT Innovation Cloud. Relying on China's electronic autonomous computing system and rich Internet communication industry resources, it has strongly implemented cloud number integration, and built the “China e-Cloud”, the only cloud platform under China Electronics. It provides high-security digital infrastructure for government, financial institutions, public service agencies, and large group enterprise customers. It has built a China e-IT cloud cloud base positioned as critical information infrastructure in Beijing, and has also provided government clouds in Wuhan, Suining, Dali, Datong, Wenzhou and other places. We believe that the company has strong competitiveness in the electronic cloud sector. With the company's strong self-research capabilities and the support of a high-quality cooperative group, it can seize opportunities in the face of the future exclusive cloud market, and the revenue space is vast.

Data element engineering series product construction. The company that maintains future industrialization competitiveness is a core participant in China's electronic data innovation business. It is the main developer of the data element series product, and the main implementer of specific projects. In terms of “data factorization,” the Data Governance Engineering Research Institute was jointly established with China Electronics and Tsinghua University, and the “Overall Plan for Data Security and Data Elementalization Engineering” was formed, reviewed by relevant experts, and applied on a pilot basis in the regions concerned. In the field of technology and products, three common technologies have been constructed: a decoupling technology system for raw data and data application, a data vault technology system, and a data element (component) processing and transaction technology system, and have been systematically verified in pilot projects. At present, the company has formed a series of data element engineering products such as a data vault, a data element processing and trading center, and a safe and reliable data space, and has carried out pilot projects in Deyang, Zhengzhou, Dali, Jiangmen, Wuhan, and Xuzhou. We believe that the company is expected to continue to maintain competitiveness in the era of industrialization of the data element market in the future.

High-tech industrial engineering services continue to grow, and the company's revenue level is steady. The company is a leading enterprise in the field of high-tech industrial engineering services. Since its establishment, it has focused on serving high-tech industrial customers in the fields of electronic information, biomedicine, new infrastructure, and new energy. This business is currently the company's main source of revenue. Revenue for the first half of 2023 was 25.133 billion yuan, an increase of 22.72% over the previous year, accounting for 94.06% of the company's total revenue. At present, many of the company's high-tech industrial projects have won the title of “National Quality Project”.

Profit forecasting and valuation

We predict that the company will achieve revenue of 570.95/645.57/73.437 billion yuan in 2023-2025, with a year-on-year growth rate of 11.84%/13.07%/13.75%, corresponding net profit of 306/475/657 million yuan, a year-on-year growth rate of 188.77%/55.18%/38.29%, corresponding EPS of 0.27/0.42/0.58 yuan, corresponding PE of 103.47/66.68/48.22 times. Maintain the “increase in holdings” rating.

Risk warning

Macro environmental risks, risks that policy implementation falls short of expectations, and R&D investment affect the company's overall operating performance.