Core view
The sector index rebounded after falling last week, falling 0.7% for the whole week. The performance of electronic licenses and smart cars was relatively good, while the performance of other sectors was relatively average. We maintain our previous view that the valuation of the sector has a good margin of safety and a certain upward space, while the stabilization of the peripheral market and the subsequent policy expectation of the digital economy are expected to provide power for the upward trend of the sector. However, the recent epidemic in China will disturb the performance of a small number of Companies in the first quarter. We believe that the head companies and the targets with better performance expectation in the first quarter should be preferred at present.
The callback of leading cloud computing enterprises is relatively sufficient, and the business continues to advance. Since the beginning of 2020, with the downward trend of the valuation system in China’s foreign markets, the valuations of overseas SaaS companies and Chinese cloud computing companies have experienced a significant correction. We believe that the fundamentals of relevant enterprises are still solid, and the stock price has a good attraction at present. Investors are advised to pay attention to it.
The promotion of digital infrastructure and information innovation is worth looking forward to. The government work report proposes to “build digital information infrastructure” and “improve the technological innovation and supply capacity of key software and hardware”. We believe that as a part of digital infrastructure, the launch of “digital computing from the east to the west” will drive the development of a series of upstream and downstream industries such as servers, and the information innovation work will be further expanded in 2022, and the whole information innovation industry is expected to usher in a new round of business cycle.
Industrial digitization is expected to accelerate. The government work report mentioned “promoting industrial digital transformation”. We believe that technologies such as Internet, cloud computing, big data and artificial intelligence are accelerating the integration with various industries to help customers in downstream industries reduce costs, improve quality and efficiency, and even build a platform and ecological development model. We believe that under the background of accelerating the development of digital economy, industrial Internet platform companies deserve attention. The digital leader of subdivided industries such as electric power and coal mine will also usher in the cycle of business acceleration.
“New urban construction it” is not only a steady growth, but also a support for optimizing people’s livelihood. The government work report proposes to “accelerate the renewal and transformation of urban gas pipelines and other pipe networks, improve flood control and drainage facilities” and “strengthen the construction of municipal facilities and disaster prevention and reduction capacity”. In the near future, the national development and Reform Commission will also organize the pilot work of leakage prevention and control throughout the country, which is the first time to support the intelligent construction of local water affairs with central financial funds. We believe that leakage control in the water industry and intelligent energy-saving transformation in the heating industry are important components of “new urban construction”, and relevant companies are expected to accelerate their development.
Investment proposal and investment object
Cloud Computing: recommend leading digital office Beijing Kingsoft Office Software Inc(688111) ( Beijing Kingsoft Office Software Inc(688111) , overweight), digital architecture leading Glodon Company Limited(002410) ( Glodon Company Limited(002410) , not rated), Kingdee International, Yonyou Network Technology Co.Ltd(600588) ( Yonyou Network Technology Co.Ltd(600588) , buy).
Digital infrastructure and information innovation: recommend the leader of information innovation server Dawning Information Industry Co.Ltd(603019) ( Dawning Information Industry Co.Ltd(603019) , buy); It is suggested to pay attention to the leader of OA industry Shanghai Weaver Network Co.Ltd(603039) ( Shanghai Weaver Network Co.Ltd(603039) , not rated); Financial information creation integrator and banking software platform: Digital China Information Service Company Ltd(000555) ( Digital China Information Service Company Ltd(000555) , buy), Shenzhen Sunline Tech Co.Ltd(300348) ( Shenzhen Sunline Tech Co.Ltd(300348) , not rated).
Industry digitalization direction: recommend Industry Internet platform provider Beijing United Information Technology Co.Ltd(603613) ( Beijing United Information Technology Co.Ltd(603613) , buy), recommend paying attention to power informatization manufacturer Ygsoft Inc(002063) ( Ygsoft Inc(002063) , not rated), coal mine intelligent participant Hefei Gocom Information Technology Co.Ltd(688367) ( Hefei Gocom Information Technology Co.Ltd(688367) , not rated).
It field of new urban construction: recommend the leader of intelligent water supply Zhejiang Heda Technology Co.Ltd(688296) ( Zhejiang Heda Technology Co.Ltd(688296) , buy), and pay attention to the leading enterprise of intelligent heating Runa Smart Equipment Co.Ltd(301129) ( Runa Smart Equipment Co.Ltd(301129) , not rated).
Risk tips
The implementation of policies is less than expected, and the progress of R & D is less than expected.
