\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 845 Shanghai Baosight Software Co.Ltd(600845) )
Event: the company achieved an operating revenue of 11.759 billion yuan in 2021, yoy + 15.01%; The net profit attributable to the parent company was 1.819 billion yuan, yoy + 35.92%; Operating net cash flow was 1.928 billion yuan, yoy + 25.68%. Among them, 21q4 achieved an operating revenue of 4.354 billion yuan, yoy + 2.81%, QoQ + 55.10%; Net profit attributable to parent company: 403 million yuan, yoy + 12.35%, qoq-17.71%; Operating net cash flow was 169 million yuan, yoy + 54.84%, qoq-68.85%.
Over the years, the results of high R & D investment have gradually shown, and high-end products have helped to increase revenue and gross profit margin. In 2021, the company’s revenue increased by 15.01% year-on-year, and the gross profit margin increased by 3.39 PCT. Among them, the revenue of software development and engineering services increased by 19.10% year-on-year, and the gross profit margin increased by 3.44pct; The service outsourcing business increased by 8.87% year-on-year, and the gross profit margin increased by 3.88pct. The company’s software development business is mainly industrial software and information system integration business for steel, nonferrous metals and other manufacturing industries, and the service outsourcing business is mainly IDC & cloud business. On the one hand, the company’s revenue growth comes from the increased demand for information transformation of downstream industries represented by iron and steel, on the other hand, it comes from the launch of high-end products such as PLC (programmable logic controller). In 2021, the company successively released data center stage, business center stage and artificial intelligence center stage, and launched self-developed PLC products, breaking through the “neck” situation that the control system of metallurgical production line depends on imports for a long time. In 2021, the company continued to increase investment in industrial informatization, PLC and other aspects. The annual R & D cost reached 1.290 billion yuan, with a year-on-year increase of 29.60%, and the R & D rate remained at 10% for many years. With the continuous high R & D investment, the improvement of gross profit margin has continuously verified the improvement of the competitiveness of the company’s products.
During the “14th five year plan” period, the pattern of iron and steel industry tends to be centralized, and Baowu iron and steel, the company’s actual controller and main customer, is expected to fully benefit as a leader. Formerly a wholly-owned subsidiary of the former Baosteel Group, the company has long provided information and automation technology solutions for Baowu group and its subsidiaries. In 2021, the company’s revenue from Baowu group and its subsidiaries was 6.134 billion, accounting for 52% of the overall revenue. As the company’s main customer, the CR10 of Baowu group’s steel industry in 2020 was only 39.2% (Lange steel data). According to the guidance on promoting the high-quality development of the iron and steel industry issued by the Ministry of industry and information technology, several world super large iron and steel enterprise groups will be built during the “14th five year plan” period, and the industry CR10 target is 60%, which has greater room for improvement compared with the current industry concentration. On the one hand, the iron and steel industry strengthens the bargaining power of upstream mine resources through integration and M & A, on the other hand, it improves the operation efficiency through information transformation and other measures. Baowu group, the actual controller of the company, is the leader in China’s iron and steel industry, benefiting from the improvement of industry concentration. In 2021, its competitiveness jumped from 11th to 5th in the world, and its annual iron and steel output ranked second in the world (WSD data). Benefiting from the integration and expansion of Baowu group in recent years, the revenue from Baowu group and its subsidiaries in 2021 increased by 75% year-on-year, and the relevant quota increased by 32% in 22 years, It reflects that the demand for informatization from Baowu Group continues to increase, and the integration of the iron and steel industry is expected to bring sustained demand growth to the company in the future.
“PLC + industrial software + IDC” has obvious advantages in the whole industry, and customer & industry expansion promotes growth. The company relies on Baowu group to carry out information-based business, and plays a good synergy with the group in business. The business territory extends from information-based to the upstream of IDC, PLC and other industrial chains, and the customers also continuously extend from Baowu group to both domestic and foreign customers. For example, the company has obvious advantages in obtaining IDC land resources. Baozhiyun IDC industry is located in Baoshan District big data Industrial Park in Shanghai. Relying on its superior geographical location, it has attracted large customers other than Baosteel, such as The Pacific Securities Co.Ltd(601099) insurance. In addition, relying on the advantages of information transformation in the iron and steel industry, the company continues to expand to nonferrous metals, rail transit and other industries. Relying on Baowu group, the company’s industrial Internet industrial chain layout is perfect and its competitiveness is outstanding. It is expected to continue to expand its market share in the future.
Profit forecast and investment rating of the company: we expect the net profit of the company from 2022 to 2024 to be 2.410 billion yuan, 3.119 billion yuan and 3.891 billion yuan respectively, corresponding to EPS of 1.59, 2.05 and 2.56 yuan respectively. The current share price corresponds to the PE value from 2022 to 2024, which is 31, 24 and 19 times respectively. By virtue of the “information-based” industrial layout and recommendation, the company continues to expand its market share and maintain its strong competitiveness in the field of industrial chain.
Risk tip: the demand for steel informatization is lower than expected, and the progress of IDC on the shelf is lower than expected.
