State-owned leader in digital information services, maintaining the “buy” rating. We maintain the net profit forecast for 2023-2025 at 261, 4.94, and 715 million yuan. EPS is 0.23, 0.43, and 0.63 yuan/share, respectively. The current stock price corresponds to PE 121.6, 64.2, and 44.3 times, respectively. Considering the company's leading position in the field of state-owned clouds and data elements, we maintain the “buy” rating.
The size of the government cloud market continues to grow. In the first half of 2023, the data element market entered a period of accelerated development. In the first half of 2023, the company achieved operating income of 26.72 billion yuan, an increase of 17.51% over the previous year; it achieved net profit of 149 million yuan, a year-on-year loss reduction of 53.56%. By product, benefiting from the boom in downstream strategic emerging industries such as high-tech electronics, integrated circuits, biomedicine, new energy, and new infrastructure, the high-tech industry engineering service business achieved revenue of 25.133 billion yuan, an increase of 22.72% over the previous year; the digital and information services business achieved revenue of 361 million yuan, a year-on-year decline of 54.79%, mainly due to the company's active reduction in the scale of its fully integrated business and the unrealized revenue of some projects still in the delivery process; digital heating and new energy services achieved revenue of 1,057 billion yuan, down 1.22% year on year.
In the field of data elements, the company continues to lead industry innovation
The company is a core participant in China's electronic data innovation business. It has formed a series of data security and data factorization engineering products such as overall data governance project design, data treasury, data element processing and trading platform, secure and trusted data space, data element converter, data asset registration service platform, etc., and has carried out engineering practices in Wuhan, Zhengzhou, Xuzhou, Wenzhou, Deyang, and Dali.
The proposed increase is 3 billion yuan. The fund-raising project is expected to enhance the company's business scale and market competitiveness. The company issued an announcement with a proposed increase of 3 billion yuan. The main investments are: operational cloud projects (800 million yuan); distributed storage R&D projects (300 million yuan); China e-cloud R&D base phase I projects (400 million yuan); high-tech industrial engineering service projects (900 million yuan); supplementary working capital or repayment of bank loans (600 million yuan). Fund-raising projects are conducive to implementing the company's strategy, expanding transportation capacity, expanding the scale of operations, enhancing service capabilities, and further consolidating the company's core competitiveness.
Risk warning: Government spending is reduced; business progress falls short of expectations; market competition increases risk.