(report producer/ analyst : Minsheng Securities Lu Wei Guo Xinyu)
1 The main force of independent and controllable and the "national team" of data operation
Taiji shares is a leading enterprise in domestic e-government, smart cities and key industries informatization. It was initiated and established in 1987 by China Electronic Technology Group Corporation's 15th Research Institute .
Company is committed to becoming "the main force of independent and controllable, the national team of data operations, the leader of intelligent applications, and the achiever of employee value". It provides information system construction and cloud computing, big data and other services to the government, public security, national defense, enterprises, etc., covering comprehensive information technology services such as cloud services, network security and autonomous controllable, smart applications and services, and information infrastructure.
Judging from the changes in the past five years, the revenue share of the company's three major businesses, cloud services + network security + smart applications, has been increasing, and the proportion of system integration to revenue has gradually declined.
After more than 30 years of industry accumulation and accumulation, the company has multiple core competitiveness:
1) The advantages of a complete independent product system. company has formed an independent product system including Puhua operating system, Jincang database , Kingdee middleware, and Huidian office software.
2) has the advantages of the mature "cloud + number" service model, and continues to apply new technologies such as cloud computing , big data, artificial intelligence and blockchain to new business scenarios.
3) Strong industry knowledge-how. has accumulated rich application scenarios and industry experience through years of services in government affairs, public safety, enterprises and other industries.
4) Brand and shareholder resource advantages. has the most complete high-level qualifications and leading brand influence in the industry, and has won the industry reputation of "National Digital Service Team". At the same time, China Electric Technology positioned Taiji Co., Ltd. as the core industrial platform of the group company's Internet information business, promoting the resource integration and coordinated development of China Electric Taiji and Taiji Co., Ltd.
's performance has steadily improved, with a compound revenue growth rate of 15% from 2012 to 2021.
1) Revenue side: company's compound revenue growth rate reached 15% from 2012 to 2021, and its revenue scale in 2021 has exceeded 10 billion yuan.
2) Net profit attributable to shareholders: The compound growth rate of net profit attributable to shareholders from 2012 to 2021 reached 12%, and the growth rate of net profit attributable to shareholders in the first three quarters of 2022 reached 36%.
has formed a complete industrial layout in the field of information innovation.
company has completed a series of layouts of core assets in the information and innovation segment through acquisitions and investments: including Renmin University of Technology Jincang in the database field, Huidian Technology in the OA field, Puhua Software in the operating system field, and Kingdee Middleware in the middleware field. In the future, under the general trend of information innovation, the company is expected to continue to benefit.
2 Database: Renmin University of China's leading position is prominent, ranking ahead of many sub-sectors
based on independent research and development, and domestic database leading enterprises.
Beijing Renmin University Jincang Information Technology Co., Ltd. was founded in 1999 by Hong Kong University of China experts and is currently a holding subsidiary of Taiji Co., Ltd. Since its establishment, NPC Jincang has always been based on independent research and development, focusing on the field of data management, and has successively undertaken major special projects such as the national "863" and "nuclear high-grade" and developed large-scale general database products with international advanced levels. After more than 20 years of development, NPC Jincang has built a product, service and solution system covering the entire life cycle of data management and the entire technology stack.
has a leading market position, and the domestic leader has a promising future.
In 2020, Renmin University Jincang achieved the market position of the largest number of sales sets in the key application fields of domestic databases. In 2021, NPC Jincang continued to strengthen its expansion in key industries, with the number of sales sets in key application areas, and at the same time, it ranked first in domestic manufacturers in the market sales volume in China's petroleum and petrochemical industry. In 2022, Jincang Database Management System KES was selected as the State-owned Assets Supervision and Administration Commission of the State Council released ten typical results of state-owned enterprises digital technology , once again demonstrating the strength of the national team in the database field.According to IDCh data, in the 2021H2 domestic relational database market (local deployment model), the market rate of Renmin University of Technology Gold Warehouse reached 5%, leading the country.
is customer-centric to achieve win-win cooperation.
Renmin University Jincang widely serves more than 20 key industries, and its successful cases involve government affairs, energy, national defense, finance, audit, education, medical care, agriculture, water conservancy and other fields. The energy, military industry, finance and other industries have a large number of high-quality customers.
Seize development opportunities and jointly build a domestic ecosystem.
Renda Jincang has always insisted on building China's independent IT underlying ecosystem. At present, Renmin University Jincang has completed compatible adaptation with most manufacturers such as operating systems, middleware, office software, etc. that are committed to the domestic field. In the next step, NPC Jincang will continue to carry out in-depth cooperation and exchanges with relevant ecological partners, work together to innovate and develop in the field of domestic production, and provide users with a more complete, high-quality, safe and stable product solutions and service system.
products keep improving and meet the requirements of the times.
Renda Jincang's products have solved some data usage problems in targeted manner, effectively sorted out and integrated data resources, and efficiently utilized data assets. The products are mainly divided into six major categories of solutions, including general databases, analytical databases, data synchronization software, and high-availability solutions.
benefited from the promotion of information innovation and performance improved rapidly.
1) Revenue side: benefited from the promotion of information innovation, Renmin University of Technology Gold Warehouse's revenue has been growing continuously, with a compound growth rate of 56% from 2017 to 2021;
2) Net profit attributable to shareholders: After the preliminary investment period, Renmin University of Technology Gold Warehouse matured in product , market, etc., profit began to rebound, profit increased significantly in 2021, and the compound growth rate from 2017 to 2021 reached 176%.
3 Government Cloud : The "national team" demonstrates its strength, and the leader is expected to fully benefit from the industry tide
Government Cloud is the application of cloud services in the government field. It refers to the use of cloud computing technology to provide comprehensive e-government services such as infrastructure, support software, application functions, information resources, operation guarantees and information security to government agencies.
According to CIDI Consultant data, the scale of the domestic government cloud market in 2021 will reach about 78.7 billion yuan, and it is expected to reach 131 billion yuan by 2024, and the compound growth rate from 2021 to 2024 is expected to reach 19%.
Local government state-owned assets lead the construction of "State-owned Assets Cloud", and related markets are expected to develop rapidly.
From the perspectives of data security, data application, and other aspects, government affairs and key data of central and state-owned enterprises need a relatively secure information base, and "State-owned Assets Cloud" has become an important trend in development.
We believe that in the future, the "State-owned Assets Cloud" led by local government state-owned assets and central state-owned enterprises and other participants are expected to accelerate its development, and relevant participating manufacturers are expected to benefit.
State-owned Assets Cloud Company integrates existing cloud resources and forms a hybrid cloud platform such as state-owned Assets Supervision Cloud, Security Cloud, Business Cloud, Data Cloud, etc., which can provide stable, reliable and secure IaaS and PaaS services to state-owned Assets System enterprises and other government departments, enterprises and institutions.
is the "national team" of the cloud service market and the "vanguard" of the digital government field.
The company itself has the advantage of CETC resource. It has been deeply engaged in the government cloud field for many years and continues to promote the development of government cloud service business in Beijing, Tianjin, Hainan, Shanxi and other places.
According to the report "China Integrated Government Service Platform Solution Market Manufacturer Share, 2020" released by IDC, the company's integrated government service platform solution market share accounts for 16.8% of the country, ranking second. The advantages of the government platform field are expected to help the company's government cloud business development.
Digital government's "national team", digital economy trend has great potential.
In recent years, the company has undertaken the construction tasks of the two major national platforms of the national government service platform and the national " Internet + Supervision" system, and simultaneously built ministries and commission-level platforms such as the Ministry of Finance, Ministry of Justice, and the Health Commission, as well as provincial and municipal platforms such as Beijing, Tianjin, Henan, Shaanxi, Hainan, Xinjiang, Tibet and other provinces and cities. Under the general trend of the digital economy, especially the digital government, the company, as the "national team" of the digital government, is expected to benefit fully.
4 OA and network visualization: Huidian Technology benefits from the trend of trust innovation, network visualization opens long-term space
Beijing Huidian Technology Co., Ltd. (referred to as Huidian Technology) is a management software and service provider in China. It was founded in August 1998 and is a wholly-owned subsidiary of Taiji Co., Ltd., a subsidiary of China Electronics Technology Group, .
Hiden Technology has been committed to providing digital product and solutions to large and medium-sized group corporate customers, focusing on software products such as digital collaboration (OA), digital supervision, and providing professional services including platform, customized application development, and management consulting. It has accumulated many central enterprise customers such as China Mobile, Sinopec , China National Offshore Oil Corporation , National Energy Group , and National Energy Group . Its market share in the SASAC directly affiliated enterprises has exceeded 60%, and its market share in the top 100 and top 500 enterprises in China has also been in the leading position in the industry.
creates three basic platforms, with multiple key information and entrepreneurship customers.
Relying on the digital working environment of China Electronics Technology, Huidian Technology has created three basic platforms: WEP digital application cloud platform, WE.Flow intelligent workflow engine , and CUBE artificial intelligence platform. It has the characteristics of microservices, groupization, and PC mobile integration. The full stack is adapted to the domestic environment and has obtained very excellent information and innovation performance evaluation data in the central bank's information and innovation ecological laboratory evaluation. In terms of
information creation, Huidian Technology's financial industry information creation office solution has been applied in financial institutions such as Bank of China , Industrial Bank , CITIC Bank , Jiangsu Bank , Nanjing Bank and other financial institutions.
Network security and independent controllable services mainly include network security, content security, information system security, and independent controllable basic products and services. The demand for public safety emergency response, network security, digital security and other fields is constantly increasing. As the "national team" in the field of Internet information, the company continues to lay out related fields and form complete solutions.
With the increasing demand for network visualization, the company is also actively making arrangements in related fields.
1) Tai Chi host monitoring and audit system: 's terminal security management product launched by for domestic environments not only has traditional host monitoring and audit products but also has process monitoring; port monitoring access control, printing and burning audit, storage media management and other conventional functions, but also adds software distribution, remote scripts and other management functions suitable for domestic environments, helping users achieve low-cost and high-efficiency remote maintenance management and comprehensive and strict terminal security management.
2) Taiji Longxiang Internet behavior audit system: is mainly aimed at party and government agencies, as well as industries such as national defense, electricity, energy, and finance, providing comprehensive and complete precise control and behavioral audit of Internet behavior. The
system mainly has functions such as Internet behavior knowledge and control, network traffic analysis and audit, visual operation and maintenance management, and realizes real-time network data collection and accurate data analysis and behavior control, providing strong support for users to fully understand network application models and traffic trends and carry out various businesses. The
system adopts the Loongson multi-core architecture, which runs a virtual OS (operating system) on the hardware architecture, and cooperates with high-performance processors to process multiple services in parallel to ensure that the TIAG6000 can still have fast and efficient business external management and protection capabilities in various large traffic and complex applications.
5 Profit forecast and valuation
Cloud service:
1) Revenue: The general trend of domestic government cloud development, the company has a CETC background and has multiple benchmark projects, and related revenue is expected to grow steadily in the future. The revenue growth rate is expected to be 10%, 10%, and 10% respectively in 22-24.
2) Gross profit margin: The business model of related businesses is stable, and the company is expected to remain competitive in the industry. Therefore, the gross profit margin is expected to be relatively stable, and the gross profit margin is expected to remain at 45% from 22 to 24.
Smart Applications and Services:
1) Revenue: As the "national team" of domestic IT construction, Company is expected to undertake more domestic IT projects to build . The company itself is also at the forefront of the industry in terms of experience, R&D capabilities, etc. Therefore, overall, smart application and service-related businesses are expected to maintain rapid development. It is estimated that the revenue growth rate will be 30%, 25% and 25% in 22-24 respectively.
2) Gross profit margin: related business business model is stable, and the company is expected to remain competitive in the industry, so the gross profit margin is expected to be relatively stable, and the gross profit margin is expected to remain at around 41% from 22 to 24.
Network security and services:
1) Revenue: Innovation is the general trend, and related businesses include Innovation business. Therefore, under the trend of accelerated domestic substitution in the future, the company is expected to obtain more orders based on its own advantages and layout in databases, OA and other fields.
In the medium and short term, since 2019-21 is a period of relatively concentrated release of government information innovation demand, the growth rate in 2021 is relatively high. In 2022, due to the temporary end of the government information innovation peak and the large-scale release of industry information innovation demand, the growth rate in 2022 is expected to be relatively slow, with the corresponding growth rate of 15%; in 2023, with the advancement of industry information innovation, the demand for the entire industry is expected to be released, so we expect the revenue growth rate to rebound in 2023, with the revenue growth rate of 30% and 30% respectively in 2023.
2) Gross profit margin: The business model of related businesses is stable, and the company is expected to remain competitive in the industry. At the same time, considering that the company undertakes part of the general contracting business in the field of information and innovation, it is expected that the gross profit margin will remain at around 11% from 22 to 24.
System Integration Service:
1) Revenue: Strategically speaking, the company will control the proportion of integrated business to a certain extent. Therefore, as the company's overall revenue scale grows, the company's related business scale is expected to maintain a slight growth. Assuming that the revenue growth rate remains at 3% in 22-24.
2) Gross profit margin: related business business model is stable, and the company is expected to remain competitive in the industry. Therefore, the gross profit margin is expected to be relatively stable, and the gross profit margin is expected to remain at around 11% from 22 to 24.
Other businesses:
1) Revenue: It is mainly accompanied by some supporting development and other services of the main business, and it increases with the company's overall business scale. Assuming that the revenue growth rate remains at around 15% in 22-24.
2) Gross profit margin: The business model of related businesses is stable, and the gross profit margin is expected to remain at around 70% from 22 to 24.
Expense rate forecast:
1) Sales expense rate: Considering that the company needs to continue to expand in the future in government cloud, information and innovation markets, sales investment is expected to maintain a certain intensity. Considering that revenue is steadily increasing, the sales expense ratio is expected to decline slightly, and the sales expense ratios from 2022 to 2024 are expected to be 2.3%, 2.2% and 2% respectively.
2) Management expense ratio: company is in the investment period in the future, and the absorption of R&D and other talents is expected to continue, and it is ready for long-term development. Therefore, it is expected that the management expense ratio will remain at around 8%.
3) R&D expense ratio: In the key areas of information innovation, R&D has become an important competitive factor. In order to maintain competitiveness, the company will continue to invest in R&D. It is expected that the R&D expense ratio will remain at a relatively high level. It is expected that the R&D expense ratio will be 6%, 6%, and 6% respectively from 2022 to 2024.
According to the business in the fields of the company's database, OA, government affairs cloud, network security and information innovation, and considering the characteristics of the company as the "national team" for domestic IT construction, Zhiyuan Internet (OA), Oriental Connect (middleware), Guardian Connect (network security, central enterprise background), and Nanwei Software (government affairs cloud, central enterprise background) are selected as comparable companies. At the same time, considering that the relevant companies are leading enterprises in subdivided fields and are comparable to the company's industry status. The average PE of related companies in 2022/2023 is 49X/36X, and the company is 40X/33X, which has certain valuation advantages.
is a leading enterprise in the domestic IT field. Under the general trend of information creation, it is expected to further strengthen its advantages in the information creation field and build a basic software industry system covering operating systems, databases, OA and middleware. As the "national team" and "vanguard" of government affairs cloud and information creation, it will usher in new development opportunities.
expects the company's net profit attributable to shareholders from 2022 to 2024 to be 462/567/717 million yuan, corresponding to PEs of 40X, 33X and 26X respectively.
6 Risk warning
1) Risk of intensified industry competition. 's company's business involves multiple sub-sectors, and competition in sub-sectors may intensify; at the same time, the company will also penetrate into other industries and will also face competition from competitors in the corresponding sub-sectors.
2) Risk of technological innovation. The database, operating system and other fields of are located in a high-level technology pen cumulative field, and are in a stage of rapid development, and customer demand is also showing a trend of rapid iteration. Therefore, it poses higher challenges to the company's technological innovation.
3) The downstream economic climate is lower than expected. Most of the company's businesses face the government industry. Due to the influence of their own financial resources and other aspects, some local governments have slowed down their IT spending, and there is still a possibility of fluctuations in the future.
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