Under the general trend of the modernization of social governance system and governance ability, the company, as the leader of domestic digital urban management, deepens the construction of intelligent city and maintains the steady growth of the company's fist business. business tentacles extend to the urban social governance, underground pipe network and urban operation areas, the four major factors jointly shape the new momentum of growth and help to achieve "one network management".
Main points of investment
Digital urban management: upgrading from 2.0 to 3.0, the leading position in the industry lays the foundation for growth and the company's market share of digital urban management business has reached 70%. In the digital urban management 1.0 to 2.0 phase, has released two smart city management platform products Zhixin, Zhiyun platform, product architecture cloud, intelligent iterative upgrade, the sword refers to "multi-network in one". Marginal change: the latest policy requires digital urban management business to upgrade from 2.0 to 3.0 at the national, provincial and municipal levels with system interconnection, data synchronization and business coordination.
Urban social governance: the center of gravity moves down to the grass-roots level, opening up the last kilometer of data, technology and policies double promote the demand center of comprehensive governance to move down to the grass-roots level, bringing urban governance IT demand increment space. The forward-looking layout of the company's business to the grass-roots level, short-term epidemic catalysis under the benchmarking project continues to open up a new situation, which is expected to help promote nationwide. With long-term access to the last kilometer at the grass-roots level, perfect data information and business layout are expected to help the urban brain to make decision-making more accurate and enhance user stickiness.
Underground pipelines: detection, repair of two-wheel drive, new elasticity brought by intelligent upgrading, the construction scale of intelligent pipe network in China is constantly expanding, which is expected to exceed 400 billion yuan in 2022 (Note: Sadie consultant forecast). Jindi Pipeline, a subsidiary of Jindi Pipeline, as a leading domestic pipe network exploration company, has transformed its business to repair. By February 2020, the company's on-hand order reached a record high of 392 million yuan (disclosed by the announcement), and its positive contribution to performance is expected to continue.
City operation: or hope to help optimize the company's business model, business promotion and growth can be expected for the company to rely on the market, talent and experience accumulated in the construction of smart cities over the years. So far, the company has covered nearly 130 cities in the outsourcing of information collection services (disclosed in the 2020 semi-annual report), and the city operation business is expected to help the company optimize its overall business model in the future.
Profit forecast and valuation
Under the general trend of modernization of social governance system and governance capacity, the company, as the leader of domestic digital urban management, has strong certainty in the growth of digital urban management business, and urban social governance brings new increments in grass-roots business. after the adjustment of the business structure of the underground pipe network, it is expected to continue to make a positive contribution, and the urban operation business is expected to help the company optimize its business model.
It is estimated that the return net profit of the company from 2020 to 2022 is 1.43 hundred and thirty-seven million yuan, EPS 0.37 million yuan and 0.49 yuan, respectively, and the share price before the corresponding PE is respectively times that of 37-30-22. Coverage for the first time, with a "buy" rating.
Risk tips: downstream demand is not up to expectations; business development is not up to expectations; industry competition is intensified.