\u3000\u3 China Vanke Co.Ltd(000002) 368 Taiji Computer Corporation Limited(002368) )
Event: the company announced on April 15 that in 2021, the operating revenue was 10.505 billion yuan (+ 23.11%), and the net profit attributable to the parent company was 373 million yuan (+ 1.19%).
Key investment points:
"Cloud + number" is growing rapidly, and the advantages of digital government are consolidated. During the reporting period, the company achieved an operating revenue of 10.505 billion yuan (+ 23.11%) and a net profit attributable to the parent company of 373 million yuan (+ 1.19%), which was mainly due to the centralized delivery of a large number of credit and innovation projects in 2021, resulting in a decrease in gross profit margin (20.30%, - 2.40pcts), and the growth rate of net profit was lower than that of revenue. The company strengthened the market expansion in the party and government e-government and important industries, and all businesses continued to develop steadily. From the perspective of revenue structure: (1) during the reporting period, the large-scale delivery of the company's credit innovation projects was rapidly promoted, and the network security and independent controllable business achieved a revenue of 4.492 billion yuan (+ 43.89%), accounting for 42.77% of the revenue, with a gross profit margin of 10.91% (- 7.41%), and the newly signed credit innovation projects were nearly 3 billion yuan, continuing to maintain the market leadership; (2) The system integration achieved a revenue of 2.904 billion yuan (- 2.78%), accounting for 27.65% of the revenue and a gross profit margin of 10.58 (- 2.58%); (3) Smart applications, services and cloud services increased by 29.12% over the same period last year. Among them, smart applications and services achieved revenue of 2.259 billion yuan (+ 39.94%), accounting for 21.50% of revenue and 40.59% of gross profit margin (+ 3.73%); Cloud services achieved revenue of 698 million yuan (+ 3.26%), accounting for 6.64%. The company's business is more product-oriented, service-oriented and platform oriented. Relying on the government cloud, we will create a government service "one network through the Internet", an Internet plus regulation "one network management system" and an integrated social management product system. The new bid winning central government portal website two phase project (first package), emergency management department information research institute emergency management technology resources and decision support platform, Beijing big data platform, Hainan integrated government service platform and a number of provincial and ministerial level projects. According to the report "market share of Chinese integrated government service platform solutions, 2020" released by IDC in July 2021, the market share of the company's integrated government service platform solutions accounts for 16.8% of the country, ranking second. The company is replicating the successful construction experience of digital government to digital enterprises, digital national defense and other fields. According to the 14th five year plan, digital government is one of the components of Digital China. Digital society, digital economy, digital culture and digital ecology are also indispensable organic components. Market research firm IDC predicts that by 2023, more than 50% of the global economy will be driven by the digital economy. In China, the total expenditure of digital transformation from 2021 to 2024 will reach US $1.5 trillion, with an average annual growth rate of more than 17%. (4) Other businesses achieved revenue of 152 million yuan (+ 13.76%). We believe that the company has rich application scenarios and industry experience in government affairs, public security and other fields, and the advantage of "cloud + number" is prominent. With the promotion of digital construction, relevant projects will be implemented gradually in the next few years, and the company's experience replication from digital government to Digital China is expected to open up growth space.
Good cost control and continued to increase R & D investment. During the period, the four expense rates totaled 15.78% (-1.80pcts), and the expenses were well controlled. Among them, the growth rate of sales expenses was -8.06pct higher than that of revenue in the same period; Administrative expenses were -13.97% year-on-year; R & D expenses are + 53.08% year on year (R & D expenses in 2020 are + 83.15%) and R & D efforts are continuously increased: Taiji development framework integrates the technical framework of each business unit, which is conducive to building an integrated product system and improving the reuse rate; The research and development of chip collaborative innovation platform based on multi professional IP sharing enriches the company's overall solutions in the field of intelligent manufacturing; The smart medical community service platform is conducive to the platform and scheme of medical community solutions; The efficiency of low code development platform is expected to increase by more than 30%, which will greatly reduce the cost of software development; Taiji inf link IOT platform 2.0 will promote the implementation of large-scale IOT projects. Financial expenses increased by 79.09% year-on-year, mainly due to the increase of bank loans and discount interest expenses and the accrual of current interest on convertible bonds. Notes receivable, payable and accounts receivable + 54.71% and + 41.71% year-on-year, expanding with the growth of business collection scale; Inventories increased rapidly by 3.831 billion yuan (+ 55.40%), and contract liabilities by 3.514 billion yuan (+ 35.54%). The net cash flow from operating activities was 739 million yuan (- 31.80%), which was mainly due to the increase in relevant expenses incurred in the execution of contracts. We believe that the company has good cost control ability, and high R & D investment will enrich the overall solutions and applications in key areas of the company. Platform and scheme will effectively improve the efficiency and reuse rate of platform development, promote the promotion of relevant markets and improve the profit margin.
By increasing its holdings of gold warehouse and taking shares in Puhua, the independent and controllable industrial ecosystem has been improved day by day. During the reporting period, the company used part of the funds raised by convertible bonds to acquire the minority equity of Jincang of the National People's Congress and further increase its capital. At the same time, the company participated in the investment in Puhua software. After the completion of the transaction, the company holds 51.29% of the equity of Jincang of the National People's Congress and becomes the second largest shareholder of Puhua software. It has built an independent product system including Puhua operating system, Jincang database, Kingdee middleware and Huidian office software. It has become the main platform of China's basic software industry, and the independent and controllable industrial ecosystem is becoming more and more perfect. In 2021, the gold warehouse of the National People's Congress realized an operating revenue of 341 million yuan and a net profit of 31 million yuan, with a year-on-year increase of 400%, and continued to maintain a leading market share in the field of Party and government information and innovation; Support the successful launch of the first real-time online business system in the communication industry; Complete the migration of hundreds of business systems for a single customer in the financial field; Among the "three barrels of oil" localization and upgrading projects, the market share reached Petrochina Company Limited(601857) 100%, CNOOC 75% and 60 Shenzhen Kedali Industry Co.Ltd(002850) % respectively. According to the tracking report on China's relational database software market in the first half of 2021 released by IDC, Jincang database accounts for 5% of the traditional deployment model market. Puhua has deeply cultivated the domestic operating system. The desktop and server operating system has been widely used in more than 60 ministries and commissions and nearly 700 enterprises and institutions, and has been well applied and promoted in many industries such as party and government, national defense, transportation, electric power, finance, energy, telecommunications, health care and so on. Subsequently, according to the operation of Puhua software, the company is expected to further implement the shareholding increase plan. We believe that the company's increased holdings of Jincang and layout of Puhua reflect the confidence and determination of CETC to build Taiji into an online information business platform. In the future, Taiji will continue to drive Taiji to become a leading enterprise in the information innovation industry and further consolidate the company's advantages.
Investment suggestions: 1) as the national team of digital services, the company took the lead in establishing the China Electronics Technology Information Innovation Engineering Research Center, increased its holdings in Jincang and took shares in Puhua, and formed its own main product system including Puhua operating system, Jincang database, Kingdee middleware and Huidian office software; 2) There are rich application scenarios and customer stickiness in e-government and smart cities. The experience replication from digital government to Digital China is expected to open up room for growth; 3) As the core industrial platform of the group's Internet information industry, the company is expected to achieve high-quality development with endogenous + extension. We predict that the operating revenue of Taiji Computer Corporation Limited(002368) 20222024 will be 12.752 billion yuan, 15.636 billion yuan and 18.987 billion yuan respectively; The net profit attributable to the parent company is 415 million yuan, 473 million yuan and 547 million yuan respectively, and the corresponding EPS is Taiji Computer Corporation Limited(002368) 072 yuan, 0.82 yuan and 0.94 yuan respectively. The corresponding PE of the current stock price is 28 times, 25 times and 21 times respectively. With reference to the listed companies in the same industry, the company is given a PE valuation of 40 times in 2022, with the corresponding share price of 28.80 yuan, maintaining the "buy" rating.
Risk tip: the project progress does not meet expectations, policy risk and business innovation risk.
