Taiji Computer Corporation Limited(002368) (002368)
Event: the company acquired the shares of NPC Jincang held by CLP Taiji and power scientific research investment, and increased its holdings of NPC Jincang to 51%; Acquisition of 20% shares of PWC software held by cetca Taiji.
Key investment points
Increase in Jincang and take shares in Puhua: in order to implement the national development strategy of Internet information industry, improve the company’s independent and controllable industrial layout, safeguard the interests of the company and all shareholders, and improve the use efficiency of raised funds, the company plans to change some of the raised funds of the raised investment project “Taiji industrial Internet service platform construction project” to increase the Jincang of the National People’s Congress to 51% equity, Holds 20% equity of PWC software.
The company has transformed from a system integrator to a provider of basic software and solutions: at the business level, the completion of this transaction will help the company build a complete layout of domestic basic software of operating system, database and middleware, which is in line with the company’s development strategy, conducive to the company’s future development and enhance the overall competitiveness of the industry. In the future, as an important provider of basic software and solutions in China, the company will seize the opportunities of Xinchuang market and obtain sustainable benefits with a complete product layout.
NPC Jincang has become the core driving force of the company: NPC Jincang is a leading database company in China. Its core competitive advantage is mainly reflected in its technology and resource accumulation for more than 20 years. So far, it holds 24 database core patents. It is the enterprise with the highest number among domestic database manufacturers. It won the second prize of national science and Technology Progress Award in 2018, It is the highest award in the field of database in China so far. In 2020, the market share of Xinchuang exceeded 50% (based on sales). The business model is stable and has strong profitability in the future. We expect the revenue of Jincang of NPC to reach 350 million yuan this year, with a year-on-year increase of 50%.
It is expected to continue to increase its holdings of PWC software in the future: the operating system is a key link in the software industry and has good industrial synergy with the company’s existing business. The main products of PWC software are domestic operating systems. At present, it is in a growth period and its future operation is uncertain. The company plans to strengthen industrial cooperation with PwC software through the acquisition of some equity to achieve common development. Subsequently, according to the operation of Puhua software, the company is expected to further implement the shareholding increase plan.
Take a solid step forward in the reform of state-owned enterprises: in order to implement the decision and deployment of the CPC Central Committee on strengthening the army, self-reliance and self-improvement in science and technology, strengthening and optimizing the capital of a large country, implement the deployment requirements of the State Council on further improving the quality of listed companies, and in accordance with the strategic deployment requirements of CETC on focusing on the main responsibility of “three positioning” and the main business of “four plates”, Taiji Computer Corporation Limited(002368) has integrated internal resources, obtained the absolute control of Jincang of the National People’s Congress and part of the equity of Puhua software, built a basic software industry system covering operating system, database and middleware, seized the opportunities of independent and controllable industries, improved the overall competitiveness of the company, expanded market share, and built Taiji Computer Corporation Limited(002368) into a core industry platform for CETC network and information industry, Help the development of the national network information industry.
Profit forecast and investment rating: the company has changed its identity from a system integrator to a provider of basic software and solutions. In the future, it is still expected to continue to increase its shareholding in databases and operating systems, significantly enhance its profitability, and become the core industry platform of CETC’s Internet Information Industry under the tide of state-owned enterprise reform. We maintain the company’s net profit forecast of RMB 411 / 458 / 507 million from 2021 to 2023, corresponding to EPS of RMB 0.71/0.79/0.87 respectively, and the current market value corresponding to PE of 33 / 29 / 27 times from 2021 to 2023, maintaining the “buy” rating.
Risk warning: the promotion of Xinchuang business does not meet expectations; The market share in each segment is lower than expected.
