Shanghai Baosight Software Co.Ltd(600845) (600845)
It is a leading enterprise of “IDC + industrial software” in China. The company is the only listed IT enterprise under Baowu group, with stable and centralized ownership structure and sufficient management incentive. The company has a rich product matrix, covering 12 categories and enabling multiple industries. At present, the company orderly promotes the R & D of related technical components such as eplat and iplat under xin3plat brand, and completes the middle stage launch of artificial intelligence. Research and develop PLC software, break the overseas monopoly and promote the scale and industrialization of domestic independent and controllable systems.
Industrial interconnection: expanding from the steel industry to various industries, and multiple factors drive the growth of the company. At present, the development of the global industrial Internet is still in its infancy. The core capacity of China’s industrial Internet market is expected to maintain a growth rate of 20% in the next five years. The policy side continues to add new infrastructure and transform to “China smart manufacturing”. The company has been deeply engaged in the iron and steel industry, optimized MES and other industrial software, developed PLC products, and strengthened the overall advantages of the company’s products. At present, the company has basically covered all links of production control and operation management of process industry, and the expansion potential is becoming more and more obvious. Benefiting from Baowu group’s overall digital transformation, Baowu group’s integration and continuous expansion of the company’s business volume, the company expects that the amount of related party transactions with Baowu group and related subsidiaries in 2021 is expected to be RMB 7.235 billion, a year-on-year increase of 59.32%. We believe that the company’s relevant software revenue is expected to maintain a high-speed growth trend next year.
IDC business: it is an absolute leader in the industry, and the ability of resource integration cannot be copied. Baoxin IDC’s computer room is located in the core first tier city, backed by Baowu group, and revitalizes its assets by virtue of its energy consumption indicators, hydropower, location and other advantages. At present, phase 4 of “baozhiyun” has been completed, and the listing rate has been stably maintained at more than 90%. With its own ability that can not be copied, the company’s profitability has steadily ranked at the top level of the industry. It is expected that the number of Baoxin IDC racks will continue to increase in the next three years, and the number of cabinets is expected to double in three years.
As a leading enterprise in many fields of China’s iron and steel informatization, industrial software and IDC industry, the investment suggestion company is expected to benefit from the deepening reform of the supply side of the iron and steel industry for a long time. Baowu group accelerates the integration of the iron and steel industry, continuously enables the digital transformation of the iron and steel industry, and achieves the goal of “double carbon”. Continuously research and develop new industrial software products, constantly break through the monopoly of overseas industrial software products, and gradually move from the iron and steel industry to thousands of industries. At the same time, with the gradual completion of plant construction, IDC business began to grow steadily. Baoxin continued to improve the company’s profit quality and ability by relying on its strong cost control, location advantages, resource card position, industry benchmark customers and other advantages. We expect that Shanghai Baosight Software Co.Ltd(600845) from 2021 to 2023, the operating revenue will be RMB 12.531/16.588/20.851 billion respectively, the net profit attributable to the parent company will be RMB 1.682/23.71/31.77 billion, and the EPS will be RMB 1.46/2.05/2.75, corresponding to the PE level of 45.53x/32.30x/24.11x in the next three years. Maintain a “recommended” rating.
Risk tips: IDC room construction and shelf rate are lower than expected; The promotion of informatization in iron and steel industry is less than expected; The promotion of industrial Internet business is slow; The integration of the steel industry was slower than expected.
