Taiji Computer Corporation Limited(002368) (002368)
Event on December 14, 2021, the company approved the change of the project funds raised by convertible bonds through the 43rd meeting of the Fifth Board of directors. It plans to change part of the funds raised by convertible bonds for the acquisition of the minority shareholders of the Jincang of the National People’s Congress and further increase their capital, and participate in the investment in Puhua software. After the completion of this transaction, Taiji Computer Corporation Limited(002368) will hold 51% equity of Jincang of NPC and become the second largest shareholder of PWC software.
Focus on key areas of domestic software and establish a complete domestic basic software ecosystem. As a core enterprise of CETC, the company attaches great importance to the fate of the development of domestic basic software, strengthens the accumulation of core technology and overcomes the key “neck” technology. The company has always regarded revitalizing the brilliance of domestic computer industry as its mission. Since its listing, the company has invested in Kingdee Tianyan middleware for many times to create the ecology of basic software industry, Focus on the development of basic software industry. Investing in Puhua software is Taiji Computer Corporation Limited(002368) the first time to expand into the field of operating system, build a complete domestic basic software ecosystem including operating system, database and middleware, and export excellent digital services of the whole industry chain nationwide. We believe that with the gradual increase of China’s attention to network security, the demand for software localization will increase significantly. As a company with a complete domestic basic software ecosystem in China, the company is expected to continue to benefit from the future product layout.
Strive to launch leading database products, and Xinchuang will bring vigorous development opportunities. Since 2017, the company has become the largest shareholder of the NPC Jincang and actually controlled the NPC Jincang, striving to build a global leading database enterprise to provide support for the vigorous development of the NPC Jincang at the market level. From the current time point of information creation, the market rate of NPC Jincang in the field of Party and government exceeds 50%, becoming a leading enterprise in the field of database information creation. After the NPC Jincang obtained the 294 million yuan capital increase, the overall development will focus on R & D investment and market expansion, improve the comprehensive strength of products and speed up the market layout. At the same time, the NPC Jincang will become the strategic core of the company in the future and strive to become a world leading database enterprise.
Industrial reform is in full swing, and Taiji will open a new chapter in development. The company has always implemented the three-year action plan for state-owned enterprise reform. The company has always focused on enterprise digital transformation, actively guided industrial reform with innovation, and promoted the high-quality development of state-owned enterprises. After this capital increase, we will continue to steadily promote the tackling of key core technologies and industrial development of domestic software, solve the national “neck” problem, and achieve the industrial development goal while strengthening and optimizing listed companies. The company will accelerate the large-scale and industrialized application of the industry, open the “new Tai Chi” in the digital era, and contribute Tai Chi to serving the process of national digital transformation and digital China construction.
As a core listed company of CETC, the investment advice company will continue to benefit from its growth and is expected to become a leading enterprise of domestic basic software driven by many factors, such as younger management, continued in-depth domestic basic software and serving the digital transformation of Chinese government and enterprises. We expect that the company’s EPS from 2021 to 2023 will be 0.79/1.02/1.27, corresponding to PE of 34.54x/26.74x/21.58x from 2021 to 2023 respectively. Maintain a “recommended” rating.
The risk indicates that the market competition pattern intensifies the risk; The demand of downstream government and enterprise customers is lower than expected; M & a process is not as expected; The digital transformation is less than expected.
