Event Overview:
1) On May 31, Desheng Technology issued an announcement on investing in the establishment of a shareholding subsidiary and completing business registration. Desheng, Shandong Finance Development Co., Ltd. and Shanghai Zhaomi Asset Management Co., Ltd. jointly funded the establishment of Shandong Huimin Digital Technology Co., Ltd. Among them, Desheng Technology has pledged an investment of RMB 600,000, accounting for 6% of the registered capital.
2) On May 30, the company issued an announcement on the launch and listing of data products on the Guiyang Big Data Exchange and participation in the “Research on Data Factors Empowering High-Quality Employment in Regions” project planning.
Set up a shareholding subsidiary to promote the application practice of the One-Card Card
In order to build and implement a service card business for residents using social security cards as carriers in Shandong, optimize the allocation of resources from all parties, and achieve mutual benefit and win-win situation, Desheng Technology, Shandong Financial Development and Shanghai Zhaomi Asset jointly funded the establishment of Shandong Huimin Digital Technology Co., Ltd., of which Dexheng pledged 600,000 yuan, accounting for 6% of the registered capital. This time, the company followed the successful experience of the Beijing People's Livelihood Card project in the implementation of consumer vouchers and subsidy schemes benefiting the people and enterprises in Shandong. The company will make full use of the business experience and technical advantages it has accumulated over many years in the field of livelihood services, and provide comprehensive support in capital, technology, and resources to participating companies. Relying on the “Social Security Card Benefits Shandong Tour” campaign platform, we make full use of the real-name portraits of social security cards and the characteristics of wide coverage to form customized vouchers for thousands of people, which not only play the role of “promoting consumption”, but also achieve the precise effect of “protecting people's livelihood”. This cooperation highlights the concrete practice of the company's perception of the “national account” of the social security card, and further explores “people's livelihood data to serve people's livelihood.”
Data products are once again listed on the Digital Exchange. Data Factors Empower Employment Analysis Company, as a leading integrated livelihood service provider in the domestic digital economy, to continue to explore the business of digital livelihood services in depth. At the recently held 2023 China International Big Data Industry Expo (“Digital Expo”), the company's “Employment Big Data Analysis Report” data product was launched in Guizhou, and the company's four self-developed data products “Regional Employment Situation Analysis,” “Personal Occupational Background Investigation,” “Unemployment Insurance Business Verification,” and “Pension Insurance Business Verification” were successfully listed on the Guiyang Big Data Exchange. This is another successful replication after the company's data products were listed on the Fujian Big Data Exchange. At the same time, the company and five professional institutions, including the Guiyang Big Data Exchange, jointly launched the “Research on Data Factors Empowering High-Quality Employment in Regions” project plan. This project was recommended by the Guiyang Big Data Exchange and supported by the cooperation of relevant professional institutions. All parties will be demand-oriented and provide livelihood decision-making services to the employment department by combining government data and social data to carry out compliant private calculations.
According to the investor relations activity record sheet disclosed by the company on May 22, the company's data element products are result-oriented standard service products, such as statistical analysis products. One quarter will provide a copy of the latest statistical analysis results to the social sector or other relevant departments. Under the model, a subscription method will be used, and fees will be charged annually in units of districts and counties, with each district and county ranging from hundreds of thousands to several million a year. We believe that as the company's data trading products are listed on various digital exchanges one after another, the company is expected to upgrade its business model and open up market space.
Investment advice
Desheng Technology is a leading integrated service provider for people's livelihood in China. It benefits from the peak of third-generation social security card exchanges in the short term and boosts the data factor market in the medium to long term. With years of data accumulation in the field of social security and people's livelihood, the social data operation business is expected to open up room for growth. It is estimated that the company's operating income for 2023/2024/2025 will be 1,560/21.75/2,748 billion yuan, respectively, and net profit will be 1.93/2.74/342 million yuan, respectively. Maintaining the buy-A investment rating, the six-month target price is 26.70 yuan, which is equivalent to a dynamic price-earnings ratio of 30 times that of 2024.
Risk warning:
The advancement of third-generation social security cards fell short of expectations; the development of social big data operations fell short of expectations; market competition intensified; and implementation of data element policies fell short of expectations.