Leaders of the Ministry of Industry and Information Technology inspected Baoxin, hoping that key products will fully achieve domestic substitution. On the afternoon of January 31, 2024, Director Wang Yanqing of the Information Technology Development Department of the Ministry of Industry and Information Technology visited Baoxin Software for research. After listening to Baoxin Software's report, Director Wang Yanqing expressed high recognition of the results achieved by Baoxin Software as a software company that has grown from traditional manufacturing. They also emphasized that Baoxin Software will continue to step up R&D efforts, enhance independent innovation capabilities, and fully achieve localized replacement in the fields of industrial robots and key industrial software. We expect the company's net profit to be 25.9/32.7/4.27 billion yuan for 2023-2025, and EPS of 1.08/1.36/1.78 yuan, respectively. The current stock price corresponds to PE 40.6/32.1/24.6 times, maintaining a “buy” rating.
Chairman Baowu went to the Digital Industry Research Institute to express his condolences. He hoped to widely promote full-stack localized PLC products. On the morning of February 8, 2024, Baowu Group Chairman Hu Wangming and others visited the Digital Industry Research Institute to visit and pay tribute to frontline cadres and employees. He emphasized that the Digital Industry Research Institute, as a product testing and verification center for China's Baowu Localized PLC, plays an important role as an “accelerator” for the digital integration of Baowu Group. Baoxin Software's successful independent development of large-scale PLC products made the company the third company in the world after Siemens and Rockwell and the first in China, with all independent intellectual property rights for large-scale PLC hardware, runtime, and configuration software.
**** pointed out that in the future, he hopes the Digital Industry Research Institute can fully rely on China's Baowu's rich steel industry application scenarios, widely promote the implementation of full-stack localized PLC products, and implement the application of Baoxin's full-stack localized PLC products within the group, which will be promoted as the Group's special work in 2024.
China's scarce large-scale domestic PLC enterprises. From 0-1, domestic production has large replacement space, and large-scale PLC industrial software is very important in the field of industrial control. China's large PLC market share has long been monopolized by foreign investors, and the main competitive barriers for large PLCs are “core process algorithms+customer certification”. After nearly 10 years of accumulation and accumulation, the company has formed more than 200 core process algorithms, and officially launched self-developed large-scale domestic PLCs in July 2021, kicking off the domestic replacement of large-scale PLCs. Currently, it is gradually entering a period of rapid development where the market share of large-scale PLCs has increased from 0 to 1. At the same time, it is expected to use large-scale PLCs as a starting point to deepen the layout of automated products such as three-electric control systems, which is expected to open up the growth ceiling.
Risk warning: The promotion and application of large-scale PLC control systems fell short of expectations; the development of industrial robots fell short of expectations; IDC development fell short of expectations; Baowu's mergers and acquisitions fell short of expectations.