Main points of investment:
We discussed the company's acquisition of Karakal and future performance judgment in Nantian Information Series report 1, "taking advantage of the wind of consumer upgrading, breaking the wave of informatization of media assets". This report focuses on the room for restructuring and efficiency of the company.
The company raised 1.1 billion yuan per share and invested in software research and development and service system construction projects and smart city solutions and application software development projects for small and medium-sized banks respectively. The targets are Yunnan Industrial Investment Group and Nantian growth No.1 (employee stock ownership plan). Before this non-public offering, Nantian Group held 26.88% of the company. Nantian Group is a wholly owned subsidiary of Yunnan Industrial Investment Group. ICIC Group directly and indirectly controls 36.15% of the listed company through Nantian Group. Yunnan SASAC holds 45.68% of the shares of the Industrial Investment Group, which is the actual controller of the company. After the private completion, the proportion of shares held by ICIC in listed companies reached 46.32%.
As the leader of the information service industry in Yunnan Province and the only listed IT enterprise in Yunnan Province, Nantian Information can play the role of provincial enterprises in the construction of intelligent Yunnan and information service platform in the face of the procurement of information construction in the province. Under the background of the new round of reform of state-owned enterprises in Yunnan Province, Nantian Information is expected to further solve the problems of system and mechanism in this round of reform. At present, 100% of the cities above the vice-provincial level, 89% of the prefecture-level cities and 47% of the county-level cities have carried out smart city construction. Wuhua District of Kunming, Yunnan Province, was listed as the first batch of national smart city pilot areas as early as 2013. Kunming launched the "Smart Kunming" master plan in 2015, and the company plays a very important role in promoting the construction of smart cities in Yunnan Province. More than half of the funds for this private offering have been invested in smart city solutions and application software development projects.
The company's revenue has been around 2 billion since 2008, with revenue of 2.14 billion in 2015, of which information products and services accounted for 25%, software development and services accounted for 18%, system integration and services accounted for 53%, and the other 4%. According to the profit level of the same industry, the information products refer to Huijin shares (the net sales rate is about 15%), the software business refers to Anshuo, run he et al (the net sales rate is about 16%), and the system integration business refers to Tai Chi (about 4.5% net sales rate). Therefore, according to the sub-business composition, the company's endogenous business net profit space can reach about 200 million, and there is much room for improvement in the future.
Profit forecast and investment suggestion: as the only listed IT enterprise in Yunnan Province, it plays an important role in the promotion of informatization and smart city in Yunnan Province, and is expected to further solve the problems of system and mechanism under the background of the new round of reform of state-owned enterprises in Yunnan Province. Karakal merged the table for 17 years, and it is estimated that the preparatory test EPS for 2016-2018 will be 0.08, 0.35, 0.42 yuan. As a veteran manufacturer of financial information, considering the advantages the company has accumulated in the industry over the years and the policy support of the state and Yunnan Province, and referring to the valuation of the comparable company, the company is given a price-to-earnings ratio of 75 times 2017 and a six-month target price of 26.25 yuan. give a "buy" rating.
Risk Tip: the regulator failed, and the industry did not develop as expected.
