The State Council's State-owned Assets Administration Commission hopes that central enterprises will firmly promote the renewal of the AI enabling industry and maintain the “buy” rating. On February 19, 2024, the State Council's State-owned Assets Administration Commission held a special promotion meeting on artificial intelligence for central enterprises, stressing that central enterprises should put the development of artificial intelligence into overall planning, accelerate the layout and development of the artificial intelligence industry, accelerate the construction of a number of intelligent computing power centers, build a number of high-quality industrial data sets, and build a large model from infrastructure, algorithm tools, and intelligent platforms to solutions to empower the industrial ecosystem. As the state supports central enterprises to develop the AI industry, Baoxin Software is expected to benefit the core of central enterprises. 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 of 39.2/31.0/23.8 times, maintaining a “buy” rating.
Baowu promotes Baoxin Software's AI big model to redefine steel, empowering Baowu's “steel industry brain”. On December 8, 2023, Baowu Chairman Hu Wangming and Baowu General Manager Hou Angui investigated Baoxin Software's 2024 business plan preparation work. Hu Wangming emphasized that Baoxin Software should compete with top companies in the industry to continuously push itself to strengthen, improve and expand, and promote the digital transformation and intelligent upgrading of the steel industry. It is hoped Baoxin Software can anchor the difficulties and blockages in the steel production process and redefine steel with the AI Big Model.
Vigorously investing in AI model+industrial Internet platform research and development, AIDC brings new potential for growth. The company has focused on independently developing the industrial Internet platform Baolian Dengxin for many years? Plat, AI platforms, xAI kits, etc. are also actively promoting research and development of large steel AI models, laying the foundation for the development of intelligent manufacturing. The company is the leading IDC in domestic first-tier cities. Currently, IDC's supply and demand pattern continues to improve, and AI development is on the rise. IDC is expected to upgrade to AIDC, which is expected to bring the company a double impact of profit+valuation in the future.
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.