event:
1. On January 4, the digital RMB (pilot version) app was launched in major Android and Apple App Stores, but its registered account still needs to be within the scope of the pilot city. At present, the pilot cities that can open digital RMB wallets include Shenzhen, Suzhou, xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and Winter Olympics scenes (Beijing and Zhangjiakou).
2. On January 4, the central bank issued the financial science and technology development plan (2022-2025), which proposed eight key tasks, such as strengthening financial science and technology governance, Comprehensively Strengthening data capacity construction, building a green and highly available data center, and deepening the financial application of digital technology, hoping to promote China’s financial science and technology from “pillar and beam” to a new stage of “accumulation and momentum”, Strive to achieve leapfrog improvement of overall level and core competitiveness by 2025.
comment:
The digital RMB has been gradually promoted from the pilot, catalyzing the development of the financial IT industry. The central bank began to study the legal digital currency in 2014 and issued a white paper on digital RMB in July 2021. In November, Yi Gang, governor of the central bank, said that the design and purpose of digital RMB is mainly to meet China’s retail payment needs. Next, the central bank will improve the design and use of digital RMB according to the pilot situation. According to the official description, the Winter Olympic Games will become a major display scene of the digital RMB pilot project. It is expected that there may be a more mature and complete digital RMB ecological display during the period.
At present, financial it contains better investment opportunities in the field of information and innovation. The sector of the information and innovation industry as a whole has a relatively broad growth space and a clear development path. However, in the current macro environment with great downward pressure on the overall economy and tight fiscal revenue and expenditure, it is difficult to rely on government expenditure to promote the development path of the information and innovation industry. In comparison, it mainly encounters or comes from financial customers with sufficient self owned funds. Under the background of the substantial growth of data level and the rapid development of new business forms related to financial technology, the current centralized architecture system of the financial system is difficult to load the existing demand, superimposed with the policy promotion of domestic substitution. At present, the financial industry has a strong demand for stock substitution, transformation and upgrading, and the overall prosperity of the financial IT industry continues to improve.
The bank’s it growth has high certainty and deep growth momentum. From the perspective of financial sector segments, due to the large volume of business, many types of business, strong system barriers and high stability requirements, banks have a large amount of rigid investment in it every year in order to meet the requirements of stable operation and new business adaptation. At the same time, on the one hand, the proportion of it expenditure in total assets of Bank Of China Limited(601988) has a large gap compared with overseas banks; On the other hand, driven by distributed system transformation and domestic substitution, bank it has a relatively strong and definite growth momentum. Referring to the data of CCID Consulting, the market scale of IT solutions in Bank Of China Limited(601988) industry in 20 years is 38.46 billion yuan. It is expected that the scale will exceed 100 billion yuan to 118.12 billion yuan by 2025, and the CAGR will reach 25.10% in five years.
Scattered industry structure and wider coverage will benefit it manufacturers of third-party banks. Due to the strong R & D team and financial technology subsidiaries of mainstream large banks, the bank’s IT industry pattern is relatively scattered. At the same time, large and medium-sized banks have higher customization requirements for third-party manufacturers and relatively stronger voice. At present, credit innovation in China’s financial industry is being promoted step by step. With the wide promotion of the coverage of small and medium-sized banks, the market demand for third-party manufacturers and the application of standardized products of third-party manufacturers will develop rapidly. At present, the pilot is focused on the nine operating entities. With the promotion of the pilot, more small and medium-sized banks will participate in it, and the increment of business will bring the demand for system transformation, thus catalyzing the development of the overall banking IT industry.
Investment suggestion: at present, the IT system in the banking sector has strong deterministic and broad transformation needs. With the catalysis of the landing of digital RMB and policy guidance, we believe that the banking IT sector may accelerate the volume. At present, the overall valuation of this sector is at a low level. We believe that several head bank IT enterprises such as Shenzhen Sunline Tech Co.Ltd(300348) , Digital China Information Service Company Ltd(000555) , Yusys Technologies Co.Ltd(300674) , Tansun Technology Co.Ltd(300872) will benefit from the development of the industry, and several financial hardware manufacturers such as Grg Banking Equipment Co.Ltd(002152) , Beijing Infosec Technologies Co.Ltd(688201) may also benefit.
Risk tip: the transformation progress of the banking system is less than expected, the promotion of digital RMB is less than expected, and the industry competition is intensified.
