Smart recruitment leader, traditional business demand is expected to recover

The company focuses on the three major fields of smart recruitment, smart government and digital construction to provide customers with software-centered intelligent overall solutions, including specialized software platforms, operation and maintenance services, intelligent equipment products, and intelligent engineering implementation services.

The company has now set up six regional headquarters (resource centers) in Suzhou, Hefei, Shenyang, Changsha, Zhengzhou, Chengdu, etc., 23 regional operation centers in Beijing, Shanghai, Guangzhou, Jinan, Xi'an, Hangzhou, etc., and 10 major line branches in the three business segments of construction enterprises, digital construction, and transaction cloud services, which have basically achieved full coverage of the nationwide sales and service network (excluding Hong Kong, Macao and Taiwan). In the first three quarters of 2023, the company's revenue fell 13.78% year on year, and net profit to mother fell 149.64% year on year. Mainly affected by macroeconomic environmental factors, the government's tender opening and acceptance progress fell short of expectations. We believe that with the improvement of downstream government payment capabilities, the company's traditional business needs will gradually be repaired.

In the field of smart government, the company continues to promote product iteration in government services, urban management, social governance, and government operation application scenarios based on a digital platform. The business content continues to expand. In the future, it is expected to further explore data element operations and build an overall digital solution of “platform+application+operation”.

Jiangsu Province will try it first to explore public data operation methods

The General Office of the People's Government of Jiangsu Province issued the “Administrative Measures on Public Data in Jiangsu Province” as early as December 14, 2021. Since then, Suzhou issued the “Three-Year Action Plan for Open Public Data (2023-2025)” in March 2023; in November 2023, Wuxi issued the “Implementation Opinions of Wuxi City on Promoting the Construction of Data Infrastructure”, which proposed the establishment of a public data authorization operation and management service platform. It is the first local policy within Jiangsu Province to implement the national “20 Data Rules”.

Recently, the first domestic group standard “Technical Requirements for Public Data Authorization and Operation Platforms” (T/CECC024-2023) was released at the Data Element Governance and Marketization Forum of the 2nd Global Digital Trade Expo. The standard was initiated by the National Industrial Information Security Development Research Center, jointly developed by nearly 60 organizations, and will be officially implemented on December 10, 2023. As a pioneer in the field of data asset operation, Suzhou Data Asset Management Co., Ltd., a subsidiary of Suzhou Big Data Group, participated in the preparation of standards throughout the process. The standard defines the reference framework for public data licensing and operation platforms, and clarifies platform-related technical requirements in five aspects, including function, performance, operation and maintenance, security, and connectivity around the entire process of data registration, authorization, and circulation. The publication and introduction of standards has had a positive effect on regulating the construction of public data authorization and operation platforms, stimulating the value of public data elements, and promoting the healthy development of the digital economy.

The company has a state-owned background and is expected to participate in data operation. The IT infrastructure construction company currently has no actual controller. The largest shareholder is Jiangsu Cathay Pacific International Trade Co., Ltd., which has a state-owned background in Zhangjiagang, which is conducive to the development of government and enterprise IT business.

The company's smart procurement customers mainly include public resource transaction management and service departments, central enterprises, large state-owned enterprises, bidding agencies, and other government enterprises and institutions that require electronic bidding and procurement; smart government customers mainly include government affairs offices, administrative examination and approval bureaus, big data bureaus, urban operation centers, hotline linkage centers, political and legal commissions, development and reform commissions, comprehensive law enforcement bureaus, market supervision and administration, etc. Digital construction G-end customers are mainly housing and construction departments and subordinate departments such as information centers, science and technology departments, quality and safety departments, and market supervision departments. In 2023, policies related to public data operation in various cities in China will be intensively introduced, which will bring demand from government departments at all levels for industrial chain links such as data governance, data product development, and data operation platform construction, and bring potential industrial opportunities to the company.

Investment advice and profit forecasting

The company's 2023-2025 EPS is expected to be 1.51, 1.99, and 2.41 yuan, respectively, and the PE corresponding to the current stock price is 25.51, 19.42, and 16.03 times, respectively. As an application software platform developer and information technology service provider in industries such as smart recruitment, smart government, and digital construction, the market space is broad under the National 14th Five-Year Plan and the development trend of informatization in the software industry and construction industry. At the same time, the company is further exploring data element operations and is expected to build an overall digital solution of “platform+application+operation” and expand the business field. First coverage, giving a “buy” rating.

Risk warning

The recovery in downstream demand fell short of expectations; progress in data factor policies fell short of expectations; market competition intensified, etc.