\u3000\u3000 Sinosoft Co.Ltd(603927) (603927)
Insurance Xinchuang is the leader, and the “buy” rating is given for the first time
The company is the leader of insurance Xinchuang and the earliest software enterprise in China to develop insurance core system. Backed by the Software Institute of the Chinese Academy of Sciences, the company has a large number of long-term customers in the fields of finance, government, medical treatment and so on. Insurance is the core field of the company and ranks first in the industry for many years. Under the promotion of policies, the informatization of the insurance industry is accelerated, and the company is expected to fully benefit. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 580, 760 and 991 million yuan respectively, corresponding to EPS of 0.98, 1.28 and 1.67 yuan / share respectively, and corresponding to PE of current stock price of 31.0, 23.7 and 18.1 times respectively. For the first time, give a “buy” rating.
Insurance it has developed rapidly, with clear policies and independent and controllable key technologies
(1) according to IDC data, the market scale of IT solutions in the insurance industry reached 12.14 billion yuan in 2020. Driven by policies, epidemic situation, innovation demand and other factors, the IT investment of insurance institutions maintained a rapid growth. (2) In January 2022, the China Banking and Insurance Regulatory Commission issued the guiding opinions on the digital transformation of the banking and insurance industry, requiring “accelerating the construction of the digital economy and comprehensively promoting the digital transformation of the banking and insurance industry”, while clarifying the principle of “independent and controllable key technologies, reducing external dependence and avoiding single dependence”. Xinchuang is expected to improve the growth rate of the insurance IT industry.
The leading position of the company is stable and is expected to fully benefit from the acceleration of industry informatization
(1) according to IDC data, in 2020, the company’s market share in insurance it solutions reached 35.0%, far exceeding the second in the industry. Relying on the Software Institute of the Chinese Academy of Sciences and Haidian SASAC, the company has high-quality long-term customers and a stable leading position. (2) As the first manufacturer to develop the core insurance system in China, the company has developed a number of core products and improved the product matrix. 87 of the 88 property insurance companies are corporate customers, and 89 of the 91 life insurance companies are corporate customers. In the context of comprehensively promoting financial digital transformation, the company is expected to fully benefit.
“Insurance +” broadens business boundaries and opens up growth space for the financial cloud
(1) “insurance +”: insurance needs to be embedded into various industry scenarios and has the characteristics of integration with the industry. The company has cut into other industries from insurance informatization. At present, projects in various fields are gradually implemented, and the business boundary is constantly widened. (2) Financial cloud: the company is one of the first manufacturers to promote insurance it on the cloud. According to IDC data, the company has ranked first in the financial cloud application market for many years. With the control of the epidemic situation, the growth rate of the industry rebounded, and it is expected to open up for growth in the future.
Risk warning: policy promotion is not as expected; Insurance IT investment is less than expected.
