The performance of the transformational information technology service industry is stable, and the double innovation of business management will lead the company forward. In 2016, the company successfully acquired Beijing Zhongdian Xingfa Technology Co., Ltd., entered the software and information technology service industry, and maintained a steady growth of 1.671 billion yuan to 2.756 billion yuan in revenue from 2015 to 2019, with a CAGR of 18.15%. The fundamental reason is that smart city and smart land business maintain a competitive advantage. In addition, as the leading domestic intelligent China comprehensive solution provider and operation service provider, the double innovation of business model and management model will lead the company to move forward steadily.
Continue to develop a new track in the smart city. The company's independent and controllable cloud computing, cloud storage, container cloud and other products have carried out mutual certification with mainstream domestic chip and domestic operating system manufacturers, including Huawei, Godson, Tongxin, etc., realizing complete hardware localization replacement and domestic operating system adaptation, and constantly increasing the proportion of independent products in traditional smart cities (such as Xueliang engineering, intelligent transportation, intelligent urban management, etc.). And based on the strong comprehensive competitiveness of edge / cloud / trinity to develop the new track business of global science smart city (DI+DA).
Layout smart China business, continue to invest in research and development. The company adheres to the main business development strategy of taking smart China business (including smart city, smart national defense and smart time and space) as the leader, 4G/5G new basic communications service and new generation high-speed backbone optical fiber network service as its two wings, adhering to the technology research and development route of "independent control and domestic replacement", and continuously increasing technology and R & D investment. Based on the omni-directional layout of core technology, independent products and business collaboration, we can master the ability of the whole intelligent Chinese comprehensive solution system "from front-end intelligent perception to intermediate network transmission, and then to cloud and intelligent applications".
Company profit forecast and investment rating: the company is based on smart city business, expand operator business, forming a unique advantage of R & D-driven cost reduction, considering that the company is facing a broader market space, we estimate that the company's 2020-2022 net profit is 4.57,6.10 and 791 million yuan respectively, corresponding to EPS of 0.66,0.88 and 1.14 yuan respectively. The current stock price corresponds to the PE value of 13.39,10.01 and 7.73 times from 2020 to 2022, respectively. Optimistic about the company's business prospects, for the first time covered to give a "recommended" rating.
Risk hint: the demand for business construction of operators slows down; the uncertainty of policy and market competition