Taiji Computer Corporation Limited(002368) (002368)
Event: the company announced that the board of directors considered and approved the change of funds raised by convertible bonds for investment projects: the company plans to change part of the funds raised by convertible bonds to purchase part of the equity of the Jincang of the National People’s Congress and further increase its capital, and participate in Puhua software at the same time. After the completion of this transaction, the proportion of equity held by the company in the NPC Jincang will change from 33.28% before the transaction to 51%. At the same time, the company will also hold 20% equity of Puhua software and become the second largest shareholder of Puhua software.
Comments: the above equity acquisition is in line with the company’s development strategy. PwC software and NPC Jincang are the core enterprises in the CETC network and information sector. Through this transaction, the company will obtain the absolute control of NPC Jincang and some equity of PWC software, build a basic software industry system covering operating system, database and middleware, and become one of the few digital service providers in the whole industry chain in China. The company’s business will also be transformed from a system integrator to a basic software and solution provider. The industrial layout will be further optimized and will benefit more from the accelerated promotion of the national information innovation and digital strategy.
As a domestic data management software and service provider with independent intellectual property rights, NPC Jincang has always been based on independent research and development and focused on the field of data management since its establishment. After nearly 20 years of development, it has grown into today’s leading domestic database enterprise. The National People’s Congress Jincang has built a product, service and solution system covering the whole life cycle of data management and the whole technology stack. The products are widely used in more than 20 key industries such as e-government, national defense and military industry, electric power, telecommunications and finance, and nearly 1 million sets have been installed and deployed. As the credit innovation market began to grow rapidly in 2020, the NPC Jincang’s market share in the party and government credit innovation market exceeded 50%, and its business situation continued to improve. The revenue of the NPC Jincang in 2020 was 241 million yuan, a year-on-year increase of 184%; The net profit was 6.26 million yuan, a year-on-year increase of 65.44%. In the first three quarters of 21 years, the revenue was 182 million yuan and the net profit was 13.28 million yuan, which was higher than that of last year.
Puhua software is mainly engaged in operating system business, with a full range of products and solutions for desktop operating system, server operating system, real-time embedded operating system and automotive electronic AUTOSAR operating system; Since its establishment, it has completed more than 70 topics such as “nuclear high base” and “industrial strong base”. Puhua desktop and server operating systems are widely used in more than 60 ministries and commissions and nearly 700 enterprises and institutions; Puhua automotive electronics AUTOSAR operating system has produced more than 5 million sets, The product has achieved the highest level of international automotive functional safety (asild), the leading technology in China, is one of the basic software manufacturers with the largest number of application cases and mass production of independent products of automotive operating system in China, and has the strength to compete on the same platform with foreign manufacturers vector, ETAS and EB. In 2020, PwC software achieved revenue and net profit of 93.88 million yuan and 1.53 million yuan respectively; in the first three quarters of 21 years, it achieved revenue of 56.73 million yuan and – 5.81 million yuan.
Investment suggestion: considering that the layout of basic software will increase investment, the net profit forecast for 21-23 years will be lowered to RMB 441 / 528 / 655 million respectively (6.17% / 9.28% / 10.64% respectively), maintaining the “overweight” rating.
Risk tip: the implementation of information security and information innovation policies is less than expected, the development of innovative businesses such as cloud computing is less than expected, the company’s products can not meet the needs of customers in time, and the overall market risk.
