\u3000\u3000 Glodon Company Limited(002410) (002410)
As a leading enterprise of China State Construction Engineering Corporation Limited(601668) informatization, the company has always been closely concerned by the market. In this report, we re examined the development context of the company, combed all aspects of informatization and digital transformation of the construction industry with a relatively complete framework, and combined with the current construction real estate situation, we are committed to clarifying the development status, growth prospects and development path of the company’s three major businesses.
The digital transformation of the construction industry is the general trend, and the long-term space is expected to reach 500 billion yuan. The vast majority of human social activities need to be carried out in a certain infrastructure space. This attribute determines that the market scale of the construction industry is very large. In 2020, the total output value of China State Construction Engineering Corporation Limited(601668) industry will be 26.4 trillion yuan, accounting for about 26% of GDP. The construction industry has the attributes of high customization, large number of players in the industrial chain, scattered and complex interests, large personnel mobility and many changes. There are problems such as low operation quality, poor development sustainability, frequent safety accidents and quality events, which means that there is a huge potential space for digitization. Labor pressure and real estate reshuffle forced the transformation and upgrading of the construction industry. With the popularization and maturity of mobile, cloud, Internet of things, Bim and other technologies, China State Construction Engineering Corporation Limited(601668) industry informatization ushered in a golden period of development. According to our assumptions and estimates, the medium and long-term IT market scale of China State Construction Engineering Corporation Limited(601668) industry is about 500 billion yuan, of which software and services are about 200 billion yuan.
Digital cost business: cloud transformation continues to exceed expectations, and there is still a large space in the future. Cloud transformation is conducive to the breakthrough of the company’s business model, making the growth driver of cost business move from increment to stock, reducing periodicity and highlighting growth. In 2017, the company’s cost business began to cloud by region and product. In 2021, the first phase of cloud transformation was basically completed, and the main products in China have been cloud transformed. The conversion rate and renewal rate have basically exceeded 80%. The revenue scale continues to exceed expectations. The cost return revenue reached 3.4 billion yuan in 2020 and 24.3% CAGR in 2017-2020, Behind the growth, it mainly benefits from the transformation of pirated users and the rapid growth of engineering information business. We believe that the future growth space of the company’s digital cost business is 7-10 billion yuan, which will be reflected in four aspects: the improvement of value-added services, the breakthrough in application fields, the process of internationalization and the growth of public resource transaction management system.
Digital construction business: in the 100 billion level blue ocean market, the company has achieved double improvement in customer coverage and penetration by building a “platform + component” product system, and the second growth curve is beginning to emerge. The digitization of construction business is the core difficulty of digitization of construction industry. After the major application breakthrough of science and technology in recent ten years, the huge market of construction digitization, which is 100 billion yuan, was officially opened. At present, the company has formed a relatively complete digital construction product system of “platform + component”, covering enterprise level, project level and post level, as well as business, technology and production business lines. We believe that the company has a complete product system in construction digitization and can quickly and continuously adjust its strategies. Under the background of digital transformation of the construction industry, the construction business is expected to lead the company’s second growth curve and further consolidate the company’s position as a service provider of digital construction platform.
Digital design business: localization + legalization as the core driving force, and the double line layout of “self research + M & a” creates the third growth curve. As the upstream link of the construction industry, design has a strong clamping effect on downstream construction, operation and maintenance. Especially under the current integration of design and construction, the importance of design is more prominent under the condition of the connection of the whole process of data and the high demand for pre simulation. We expect the potential market size of Chinese design software to be 30 billion yuan in 2026 (due to the existence of a large number of piracy, the actual market size is much smaller). At present, the Chinese design software market is basically monopolized by foreign manufacturers. Driven by localization and legalization, the industry demand is expected to continue to release. In the digital design business, the company implemented the business layout in the mode of “self research + M & a”, and officially released the self-developed digital architectural design software in 2021. We believe that the company is expected to build a third growth curve with extremely high competitive barriers through the rapid iteration of customers with its independently developed three-dimensional graphics platform.
Profit forecast and investment suggestion: it is predicted that the company’s revenue from 2021 to 2023 will be 5.216/65.51/8.263 billion yuan respectively, the net profit attributable to the parent company will be 6.57/9.83/1.401 billion yuan respectively, the EPS will be 0.55/0.83/1.18 yuan respectively, and the corresponding PE will be 103 / 69 / 48 times respectively, maintaining the “buy” rating.
Risk tip: the prosperity of the construction industry is declining and the informatization progress is less than expected; The breakthrough of digital design business technology meets the bottleneck; The public data used in the research report may have the risk of information lag or untimely update.
