The company achieved revenue of 4.338 billion yuan (yoy -16.92%) in the first three quarters, net profit to mother of -28.28 million yuan (profit of 0.132 billion yuan for the same period last year), after deducting non-net profit of -35.27 million yuan (profit 0.121 billion yuan for the same period last year).

Among them, Q3 revenue was 1.724 billion yuan (yoy -14.67%), and net profit to mother was 0.131 billion yuan (yoy +60.73%).

The company's revenue is under pressure, or mainly due to the slow bidding process for large-scale projects. We believe that with the acceleration of industry innovation and the release of demand for data elements, we are optimistic about the company's revenue growth in 25 years and maintain “purchases.”

CETC (CETC) plans to increase its holdings, and long-term value is recognized

On October 18, 24, the company announced that CLP Taiji (CETC 100% shareholding) plans to increase its holdings by 0.1-0.2 billion yuan, and Telecom Investment (100% CETC) plans to increase its holdings by no less than 50 million yuan.

The company's strategic position in CLP is “the core industry platform for the Internet communication business”, and it has the ability to cover all scenarios from information infrastructure to basic software to industry solutions. We believe that the increase in Telecom's holdings fully reflects the Group's recognition of the company's value and confidence in continued stable development in the future.

The demand for credit innovation in the industry is improving, and I am optimistic about the business opportunities of the Treasury database

As the core enterprise of CLP Group in the field of basic software, Denke Jincang is leading in product technology. In September '24, the centralized and distributed products of the Jincang Database passed the national “Safety and Reliability Assessment” and were awarded “Class I” in the safety and reliability rating. We believe that with the improvement in demand for credit innovation in the industry, the performance of Electronics Treasury is expected to accelerate. 24Q3 Electronics Treasury won the bid for new large-scale framing projects such as CNOOC Group and Nanrui Group. The products are expected to accelerate penetration into key industries, and we are optimistic about the performance growth of the treasury database in '24 and beyond.

The first to pass the “Data Space Platform Capability Test”. The data element market broadly focuses on the data element market, and the company adheres to trustworthiness as the foundation and scenario drive. 1) Based on trustworthiness: The premise of data element circulation is safe and trustworthy. The company built the “Taiji Trusted Data Space Platform V1.0” and became the first domestic enterprise to pass the China Academy of Information and Communications Technology's data space platform capability special test; 2) Scenario-driven:

The company has been deeply involved in industry informatization for many years, actively exploring data value mining in scenarios such as transportation, rural revitalization, industrial manufacturing, and meteorology, while exploring cross-industry and cross-field applications of data in scenarios such as urban governance and scene management. We believe that the company has an advantage in the data element market and is optimistic about long-term growth.

Investment advice: Target price of 36.94 yuan, maintain “buy”

Considering slow business progress in the first three quarters, the revenue forecast was lowered. The company's revenue for 24-26 was 9.572, 10.961, and 12.776 billion yuan (previous values were 10.145, 11.671, and 13.615 billion yuan), maintaining expectations of rising gross margin. EPS for 24-26 is expected to be 0.70, 0.86, and 1.10 yuan (previous values were 0.68, 1.01, and 1.46 yuan), respectively. Segment valuation, the estimated 25E treasury database business (54.62% of shares) is 0.559 billion yuan, comparable to the company's average 25E 13.6x PS (Wind), giving 25E 13.6x PS; other business 25E net profit of 0.429 billion yuan; comparable company's average 25E 35.9x PE (Wind), giving 25E35.9x PE, total market value of 23 billion yuan, target price 36.94 yuan (previous value 19.31 yuan) to maintain “purchase” ”.

Risk warning: Xinchuang's progress fell short of expectations, and the construction of the data element market fell short of expectations.