Incident Overview: On April 17, 2024, Shiji Singapore, a wholly-owned subsidiary, signed an MSA (MASTER SERVICES AGREEMENT) with Melco Hotels Group.

For the first time, a major international integrated resort hotel group was signed, and the internationalization process of the Shiji Enterprise Platform accelerated. 1) The Melco Hotels Group has five major international integrated resort hotels: The Melco Hotels Group is a developer, owner and operator of integrated resort facilities in Asia and Europe. The resort hotels it owns are Macau's Macau, City of Dreams, City of Dreams, City of Dreams in the Philippines, and City of Dreams in the Mediterranean Sea in Cyprus. 2) Provide support services centered on the Shiji Enterprise Platform: The services provided by the company include the Shiji Enterprise Platform with standard delivery in regions other than Macau, China, the Shiji Enterprise Platform built on the AWS Outpost rack for the Macau region of China, Shi-based payment solutions, and support services for all products. 3) It has set an industry benchmark for the promotion of Shiji PMS to a larger market: the system for managing large-scale international integrated resorts is complex and diverse, and the integration and interface are more difficult than ordinary hotel groups, so the requirements of large international integrated resort hotels for PMS often represent the high point of contemporaneous products. The successful signing of this contract and subsequent successful launch will set a good benchmark effect for the Shiji enterprise platform to enter the global international integrated resort hotel market and the entire hotel market.

The number of SEP contracts and launches continues to increase, and the long-term potential of leading global hotel SaaS companies can be expected. For international hotel group customers, the company launched SEP, an enterprise-grade hotel information system platform with a next-generation cloud architecture. 1) Intercontinental Hotels: Beginning in April and May '23, IHG launched the Shiji Enterprise Platform in large numbers. It successfully launched the 100th hotel on August 7, '23. By the end of November 2023, it successfully launched the 200th hotel, with a monthly target of nearly 30; as of April '24, IHG had about 6,000 hotels around the world. As of April '24, IHG had about 6,000 hotels around the world, and the penetration rate is expected to increase further. 2) Other international hotel groups: As of the first half of '23, Shiji Enterprise Platform launched a total of 135 hotels in hotel groups such as Peninsula, Langting, Ruby, and Sircle; at the same time, a new Dutch independent hotel chain group Fletcher Hotels was signed. The group has a total of 110 hotels, and will fully adopt the Shi-based enterprise platform with a pure cloud architecture.

Infrasys Cloud has signed contracts with many international hotels, and the internationalization strategy is progressing steadily. InfraScloud has successively obtained strict testing and bid evaluation certifications from more than ten well-known hotel groups, and has signed all contracts with the world's most influential TOP5 international hotel groups, proving that Infrasys Cloud's global leadership in products and technology. By the end of June 2023, it had launched about 3,500 customer stores.

Investment advice: The company has continued to advance since the internationalization process, using the Shiji Enterprise Platform and Infrasys Cloud as a starting point to build a large number of benchmark customers, which is expected to embark on a new journey of growth. The estimated net profit for 2023-2025 is 0.78/2.04/455 million yuan, respectively, and the corresponding PE is 224X, 85X, and 38X. Currently, the company is mainly inspecting PS during the transition period. The 2023-2025 PS is 5X, 4X, and 3X respectively, maintaining a “recommended” rating.

Risk warning: the risk of unanticipated business expansion in international markets; new technology and product development falling short of expectations; increased competition in the industry.