Dawning Information Industry Co.Ltd(603019) first coverage: the foundation of digital economy and the first localization

\u3000\u3 Shengda Resources Co.Ltd(000603) 019 Dawning Information Industry Co.Ltd(603019) )

Domestic leading manufacturer of high-end computers. The company is a leading enterprise in China's information industry. After more than 20 years of development, Dawning Information Industry Co.Ltd(603019) it has a deep technical accumulation and leading market share in high-end computing, storage, security, data center and other fields. It gives full play to the advantages of high-end computing, arranges technology research and development in cloud computing, big data, artificial intelligence and other fields, creates an advanced computing industry ecology, and provides scientific research and innovation, industrial information construction, industrial transformation and upgrading The development of digital economy has provided solid and credible support.

Server is the basis of the development of digital economy. Localization creates incremental opportunities for local manufacturers. On the demand side, consolidate the development of "digital economy", and the server market is developing at the right time; On the supply side, the CPU platform is upgraded to drive a new round of growth cycle of the industry. According to IDC's prediction, the shipment volume of China's server market is expected to achieve a compound annual growth rate of about 9% from 2021 to 2025. Localization creates incremental opportunities for local server industry chain manufacturers. In 2022, industry information innovation entered a rapid volume period, in which the upstream CPU pattern tends to be clear, and the x86 ecological advantage of haiguang information system is obvious.

The layout of Dawning server industry chain is perfect, enjoying the digital and localization trend alpha. The company is a solution provider of positioning information, deeply cooperates with customers such as government, finance, Internet and telecommunications, and enjoys the dividend of industry prosperity improvement. With the rapid development of Xinchuang and the imminent listing of the domestic x86 CPU scarce target haiguang, Dawning benefits from multiple dimensions: as one of the main demanders of haiguang CPU, the server business benefits accordingly; Haiguang's rapid growth is expected to bring sustained investment income to the company; With the improvement of CPU self-sufficiency, the profitability of the company's server products is expected to be further improved.

Investment suggestion: we predict that the company's main business income from 2021 to 2023 will be 11.183 billion yuan, 13.229 billion yuan and 14.920 billion yuan, the net profit attributable to the parent company will be 1.135 billion yuan, 1.535 billion yuan and 1.873 billion yuan, the EPS will be 0.78, 1.05 and 1.28 yuan, the PE will be 41, 30 and 25X, and the "buy" rating will be given for the first time.

Risk tip: the demand of the server industry is less than expected and the competition is intensified; The localization process is not as expected; The intensification of trade friction brings supply chain risks.

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