China's leading provider of IT solutions for the industry. Inspur Software is one of the three major listed companies under the Inspur Group. It was listed on A-shares in 1996 and is a leading provider of IT solutions for the industry in China. The company's main business includes system integration, e-government, e-commerce, etc. The company is positioned as a smart government solution and service provider, and has deep technology and experience accumulation in the fields of e-government and e-commerce.
A leading enterprise in the e-government cloud field of the future. Driven by many favorable factors, China's e-government cloud market is entering a period of rapid development. According to data from Cidi consultants, China's e-government market is expected to reach 221.8 billion yuan in 2015. The maturity of technology is expected to drive the application of cloud computing in local government and industry solutions. In the next few years, the company will focus on building local e-government cloud platforms and industry e-government cloud platforms. We believe that in terms of government cloud construction, the company not only has accumulated experience with traditional IT solutions, but also has potential resources for building the underlying IT architecture of the cloud platform. In the process of speeding up the transformation to a cloud service provider, the company is expected to become a leading enterprise in the domestic e-government cloud field.
Build a more open e-commerce cloud platform. The company has accumulated in the e-commerce field for many years, and its e-commerce solution iMai has now been updated to version 3.0. The company strives to provide an open, integrated, universal, fast and expandable e-commerce platform for the Internet transformation of traditional enterprises. In the future, the company will adopt a more open architecture to build an open e-commerce platform based on cloud computing, which is expected to (1) enhance the functions of the iMAI e-commerce platform; and (2) accelerate the promotion of the in-depth application of e-commerce platforms in other industries. Improve the competitiveness of platform services by adopting technologies such as big data.
Build a support platform for big data applications. At present, the company's big data technology has been applied in the fields of public security, e-commerce, smart cities, etc. Its advantages include: (1) Having been deeply involved in industry solutions for many years, laying a solid foundation for industry big data mining. (2) Use integrated ideas to mine industry big data. (3) Establishment of a big data ecosystem - The company is gradually opening up the entire industrial chain of big data collection, organization, storage, calculation, analysis and visualization, and is building a big data ecosystem by integrating resources from within and outside the industry.
Profit forecasting and valuation. We believe that with this additional release, Inspur Software is expected to accelerate the pace of transformation to a cloud service provider. Relying on (1) rich IT solution experience accumulated in the government and industry, (2) the group's underlying architecture resources in the cloud platform, and (3) advantages such as a state-owned enterprise background, the company is expected to become a leading enterprise in e-government cloud in China. Its projects such as e-government cloud, e-commerce cloud platform, and big data application platform are expected to further open up the company's profit space. We expect the company's EPS from 2015 to 2017 to be 0.39 yuan, 0.57 yuan, and 0.76 yuan respectively. The compound growth rate for the next three years will be 39.5%, and the target price for 6 months is 57.00 yuan/share, corresponding to PE in 2016 100 times. Mainly considering the company's experience in industry IT solutions in the e-government cloud field and the advantages that can take advantage of integrated cloud infrastructure resources, we think the company can enjoy a certain premium. First coverage, giving a “buy” rating.
Risk warning: The risk that e-government cloud projects are progressing slower than expected, the risk that e-commerce cloud platform projects are progressing lower than expected, and there are systemic risks.
