State-owned capital leader in digital information services maintains “buy” rating

We maintain the 2023-2025 net profit forecasts of 261, 4.94, and 715 million yuan, and EPS of 0.23, 0.43, and 0.63 yuan/share respectively. The current stock prices correspond to PE 91.4, 48.2, and 33.3 times, respectively. Considering the company's leading position in the fields of state-owned cloud and data elements, we maintain a “buy” rating.

Performance is in line with expectations, and the high-tech industrial engineering service business is growing rapidly

In the first three quarters of 2023, the company achieved operating income of 38.671 billion yuan, an increase of 11.44% over the previous year; net profit of net profit of 270 million yuan, a decrease of 48.25% in losses over the previous year. Among them, Q3 achieved operating income of 11.952 billion yuan in a single quarter, a slight decrease of 0.09% over the previous year; net profit of the mother was 121 million yuan, a decrease of 39.79% from the previous year. The rapid growth on the revenue side in the first three quarters was mainly due to the boom in downstream strategic emerging industries such as high-tech electronics, integrated circuits, biomedicine, new energy, and new infrastructure, and the rapid growth rate of engineering services in the high-tech industry.

In the field of data elements, the company continues to lead industry innovation

The company is a core participant in China's electronic data innovation business. It has formed a series of data security and data factorization engineering products such as overall data governance project design, data treasury, data element processing and trading platform, secure and trusted data space, data element converter, data asset registration service platform, etc., and has carried out engineering practices in Wuhan, Zhengzhou, Xuzhou, Wenzhou, Deyang, and Dali.

The proposed increase of 3 billion yuan is expected to increase the company's business scale and market competitiveness.

The company announced a proposed increase of 3 billion yuan, mainly for operational cloud projects (800 million yuan); distributed storage R&D projects (300 million yuan); the first phase of the China Electronic Cloud R&D base project (400 million yuan); high-tech industry engineering service projects (900 million yuan); and additional working capital or repayment of bank loans (600 million yuan). Fund-raising projects are conducive to implementing the company's strategy, expanding capacity, expanding business scale, enhancing service capabilities, and further consolidating the company's core competitiveness.

Risk warning: Government spending is reduced; business progress falls short of expectations; market competition increases risk.