Event: the company publishes its annual report.

The performance is in line with expectations, and the financial technology business is growing rapidly. In 2020, the company achieved operating income of 8.121 billion yuan, an increase of 4.51% over the same period last year; net profit of 317 million yuan, down 1.26% from the same period last year; deducting 318 million yuan of non-net profit, an increase of 7.42% over the same period last year; of which financial technology business income accounted for more than 40%, and revenue growth reached more than 30%, becoming the main growth pole of the company's performance.

The launch of the largest equity incentive plan in the company's history heralds a profound qualitative change. This incentive plan intends to grant 25.123376 million stock options to the incentive object, and the corresponding number of underlying shares is 25.123376 million shares, accounting for about 5.89% of the total share capital of the company on the date of announcement of the draft incentive plan, far exceeding the proportion of 2.28% of the total share capital of the first equity incentive plan. The number of incentive targets of this incentive plan is 315 (excluding reserved option incentive objects), which is also far higher than the 138 people of the first equity incentive plan. The company launched the largest equity incentive plan in history, heralding the official start of a profound qualitative change.

The company intends to acquire assets Yaxun Network is one of the leading domestic car networking enterprises, is the main domestic commercial vehicle factory, construction machinery factory mainstream supplier. The annual income of Yaxun Network from 2019 to 2020 is 713 million yuan and 809 million yuan respectively, and the net profit is 86.4209 million yuan and 71.0823 million yuan respectively. Its main business is the research and development, production and sales of vehicle networking terminals, system platforms and related services. Closely focus on five major product lines: general-purpose network connection terminal (main products are: travel recorder, T-box), human-computer interaction network connection terminal (main products: IVI, smart screen, etc.), collaborative control network connection terminal (main products are: four directions, edge computing unit, etc.), automobile information security (main product is security gateway, etc.) and big data platform system And develop in combination with Beidou navigation depth. According to the nature of customers, Yaxun network car networking business can be divided into two categories: front-loading market and rear-loading market. In 2020, Yaxun's network revenue mainly comes from the pre-installation market, and its customers are mainly commercial vehicle factories and construction machinery manufacturers. Yaxun Network designs products that meet its requirements according to the needs of the whole vehicle factory and its vehicle model specifications, and achieves customized research and development of different models, production line installation and whole vehicle departure from the factory. It is the mainstream supplier of Dongfeng Automobile, BAIC Futian, Sinotruk, Jianghuai Automobile, Shaanxi heavy truck, FAW Jiefang, Yutong bus, Jinlong Automobile, Caterpillar Inc, Zoomlion Heavy Industry Science and Technology and other major domestic commercial vehicle factories and industrial machinery factories.

The company intends to acquire assets such as Baifei Electronics is a high-performance and reliable domestic information processing platform supplier serving extremely stringent technical indicators such as shipborne, spaceborne, large aircraft, nuclear industry and so on. The annual income of Baifei Electronics from 2019 to 2020 is 462 million yuan and 432 million yuan respectively, and the net profit is 149 million yuan and 127 million yuan respectively. Its main business is all kinds of dedicated parallel computing, signal and data processing, and the design, development and sales of embedded software products. The product types are mainly all kinds of embedded board modules and blade server machines, with system integration of a small amount of computing equipment, and providing related technical services. Is a supplier of embedded dedicated computer digital modules. Baifei Electronics focuses on providing high-performance domestic computer platform, information processing platform and other overall solutions and professional services for high-end special electronic equipment. Baifei electronic customers are mainly aviation, aerospace, shipbuilding, electronics, power, rail transit and other industries overall units and head enterprises, its domestic design capability has been extended from board design to chip design and basic software design. It has more than 100 related product families based on embedded software and hardware, including nearly 60 based on Godson processors, 30 based on Feiteng processors and 10 based on Shenwei processors.

Investment advice: the company recently issued three important announcements: the acquisition of Yaxun Network and Baifei Electronics, the launch of the largest equity incentive in the company's history, and the proposed renaming to China Electric Power Digital Technology Co., Ltd., the company has two top "national team" strategic shareholders of China Electric Power Group and China Arms equipment Group, and is located in the rare listed company platform of Shanghai, the world science and technology innovation center. No matter the major shareholders' new vision for the positioning of the company's asset securitization platform or the asset quality of the main business, as well as focusing on the digital transformation and development of the industry, are undergoing profound "qualitative changes" by leaps and bounds, and we are firmly optimistic about the company's broad development prospects. considering that the audit and evaluation of the underlying assets of this reorganization has not yet been completed, the estimated valuation and proposed pricing of the underlying assets have not yet been determined, out of the principle of prudence. Do not consider the proposed acquisition of asset performance thickening, the company is expected to 2021-2022 EPS of 0.90 yuan, 1.07 yuan, to maintain the buy-A rating.

Risk hint: the restructuring progress is not as expected.