Incidents:
On January 4, 2023, Chinasoft International announced “Chinasoft International and Hongmeng Ecological Service Company Sign Cooperation Agreement to Share the Prosperity of Hongmeng Ecology”, announcing that they will cooperate with Hongmeng Ecological Service Company to give full play to their superior resources and technical capabilities, jointly explore the development path of Hongmeng Ecology in different industries, and work together to paint the prosperity of Hongmeng Ecology.
Comment:
The largest software company in China fully embraces Huawei's long-term in-depth cooperation. Chinasoft International is the largest software company in China. It has reached long-term stable cooperative relationships with cornerstone customers such as Huawei, Baidu, Ali, and CCB, and continues to help China lead the world in digital society and digital economy construction. The company has adopted a strategy of fully embracing Huawei and is fully cooperating with Huawei. The company is the first partner to sign the “HUWEI HiLink Ecosystem Solution Service Cooperation Agreement” with Huawei, and the only HarmonyOS meta-service partner with complete north-south capabilities as an IT service company. It also co-initiated the establishment of the OpenHarmony Project Group Working Committee as a startup member. It has also jointly established Shenzhen Kaihong, the Intelligent IoT Business Group (ABG), and the Intelligent Internet of Things (AIG) to build the ALot “sharp knife+legion+base camp” organizational formation, and strives to become a full scenario Hongmeng's main force and leader in ecological construction.
An important contributor to Hongmeng ecology, to jointly build a full-scene Hongmeng ecosystem. Relying on hundreds of scenarios of southbound sensing applications and years of R&D capabilities in the Hongmeng operating system's 'software root technology', the company actively provides southbound application migration services to Hongmeng ecological partners, giving full play to the advantages of HarmonyOS such as developing multi-terminal deployment at once, separable and free circulation, and unified ecological native intelligence, and efficiently connecting user needs with applications, so that applications and meta-services can obtain better commercial monetization. Along with the construction and in-depth layout of the HarmonyOS and OpenHarmony ecosystem, 1) in the 2C field, the company will provide customers with HarmonyOS meta-service ecosystem services, including development and launch, technical support, application operation and promotion, and related technical solutions; 2) In the 2B field, the company is based on the “KaiHongOS+ Super Device Management Platform”, around the integrated trend of “sense, connection, intelligence, and control” to provide a nationally produced autonomous and controllable “end edge cloud” product system for water conservancy, transportation, urban lifeline, education and other industries It provides a one-stop service from full-scenario solutions to end-to-end delivery.
Profit forecast and investment rating: We expect net profit to be 814/10.03/1.07 billion yuan in 2023/2024/2025, corresponding PE of 17/14/11 times. Considering that the company is expected to benefit from Hongmeng's ecological development, enter a period of rapid expansion and coverage for the first time, give it a “buy” rating.
Risk warning: Hongmeng's ecological construction falls short of expectations, and the competitive landscape has deteriorated