Event: the measures for network security review jointly revised by the state network information office, the national development and Reform Commission, the Ministry of industry and information technology, the Ministry of public security, the Ministry of national security, the Ministry of finance, the Ministry of Commerce, the people’s Bank of China, the state market supervision and administration, the State Administration of radio, film and television, the China Securities Regulatory Commission, the State Security Bureau, the State Password Administration, etc. was officially released and will come into force on February 15, 2022.
The measures emphasize data security and data review of network platform operators. The original measures for network security review was implemented on June 1, 2020, focusing on the supply chain security of key information infrastructure. However, with the national attention to data security, in order to implement the requirements of laws and regulations such as the data security law, on the basis of the original measures emphasizing the supply chain security of key infrastructure, it focuses on ensuring network security and data security, At the same time, the situation that network platform operators carry out data processing activities that affect or may affect national security shall be included in the network security review, and it is clear that network platform operators who master the personal information of more than 1 million users must apply to the Network Security Review Office for network security review when they go abroad for listing. According to the actual needs of the review, the CSRC has been added as a member unit of the network security review mechanism, and the national security risk assessment factors have been improved.
Multipoint driven growth, the network security industry remains the same. At present, informatization, actual attack and defense, compliance and other factors drive the industry to maintain a high outlook. (1) The National Informatization Plan of the 14th five year plan proposes that by 2025, the proportion of the added value of China’s core industries of digital economy in GDP will increase from 7.8% in 2020 to 10%. Under the background of informatization construction, it is expected to drive the network construction simultaneously; (2) (2) since this year, the three-year action plan, data security law and other policies have been intensively implemented, and the legal system related to network security has been gradually improved, driving the growth of industry compliance demand; (3) . the network protection promotes the construction demand from formal compliance to advanced practical exercises, and the customer’s safety construction demand changes from passive defense to active defense; (4) The network information security market continues to transform into software and service, and the security software and service market is expected to further accelerate.
Personnel investment brings short-term fluctuations and does not change the long-term good trend. Since 2021, network security companies have increased their investment in personnel. The sales and R & D expenses of Venustech Group Inc(002439) , Dbappsecurity Co.Ltd(688023) , Sangfor Technologies Inc(300454) and other companies have increased significantly year-on-year in 2020, resulting in fluctuations in short-term performance. We believe that under the background of optimistic about the prosperity of the industry, network security companies actively carry out personnel layout, resulting in short-term cost advance. With the stable expansion rhythm, the personnel invested in the early stage will begin to contribute to the company’s performance, and the company is expected to usher in better growth in 2022.
Plate underestimated value, high growth, safety cushion. The government is the most important downstream customer of Companies in the computer industry. In 2021, under the background of weak overall economic growth and reduced government budget, the market was worried about the certainty of the growth of the computer sector, resulting in the risk of killing the valuation in the computer industry with high valuation. At present, the overall valuation of the network security sector in the computer sub sector is low, especially in the past 21 years, the sector has experienced a round of downward valuation. At present, the PS in 22 years such as Sangfor Technologies Inc(300454) , Qi An Xin Technology Group Inc(688561) , Dbappsecurity Co.Ltd(688023) has been reduced to less than 10 times, and the PE in 22 years such as Topsec Technologies Group Inc(002212) , Venustech Group Inc(002439) , Nsfocus Technologies Group Co.Ltd(300369) has been reduced to about 25 times, with high overall security. In the first three quarters of 2021, the company still maintained a relatively rapid growth. Under the background of maintaining the high outlook of the industry, the high growth in 2022 is expected to continue, and relevant companies are expected to obtain the benefits of performance growth and valuation recovery at the same time.
Pay attention to the poor expectation of 360 Security Technology Inc(601360) . 360 Security Technology Inc(601360) previously, its main business was free security services and Internet business for the C-end. In 2019, it began to transform government and enterprise security, and solved the security needs of government and enterprise customers through “security brain”. In recent years, the government enterprise security business has maintained a rapid growth trend, with a revenue of 912 million yuan in 2021h1 (808 million yuan in 2020), a year-on-year increase of 322.45%. At the same time, the company has comprehensively expanded the fields of data security and intelligent Internet connected vehicle security through investment, mergers and acquisitions, so as to create a more comprehensive security capability. The company has strong security big data accumulation and talent echelon construction, and has the largest security database in the industry. At the same time, the government and enterprise security division has nearly 4000 personnel, and has formed a comprehensive software solution. At present, there are sufficient orders in hand. Looking forward to this year, it is expected to emerge suddenly in the government enterprise security market.
Investment suggestions: it is recommended to pay attention to 360 Security Technology Inc(601360) with poor expectations and network security leaders Sangfor Technologies Inc(300454) , Qi An Xin Technology Group Inc(688561) , Dbappsecurity Co.Ltd(688023) , Nsfocus Technologies Group Co.Ltd(300369) , Venustech Group Inc(002439) , Topsec Technologies Group Inc(002212) , Koal Software Co.Ltd(603232) , Zhongfu Information Inc(300659) , Westone Information Industry Inc(002268) .
Risk warning: policy promotion is not as expected; The government budget fell short of expectations.
