Key investment points
Event: on April 18, 2022, the issuance examination committee of China Securities Regulatory Commission examined the application of Zhejiang Dahua Technology Co.Ltd(002236) non-public offering of shares. According to the review results of the meeting, Zhejiang Dahua Technology Co.Ltd(002236) the application for non-public offering of shares was approved.
China Mobile’s stake in Dahua is a combination of strong and strong companies, with significant business synergy: in 2021, Zhejiang Dahua Technology Co.Ltd(002236) issued a draft of fixed increase, which plans to raise no more than 5.1 billion yuan, and the number of non-public shares does not exceed 30% of the total share capital before the issuance. The object of this issuance is China Mobile Communication Group Co., Ltd. after the completion of this issuance, China Mobile is expected to hold more than 5% of the company’s shares. Through this strategic investment, It helps to strengthen the coordination of the two industrial chains, and realize the technological upgrading of products and iterative innovation of production process through technical cooperation. In the future, the two sides will strengthen resource coordination on a global scale to provide strategic support for the company’s business expansion and global business collaboration. We believe that China Mobile and Zhejiang Dahua Technology Co.Ltd(002236) as leaders in their respective industries, based on business collaboration and resource linkage, promote the double improvement of their businesses and capabilities.
Operators accelerate the expansion of business boundaries and create a new ecosystem: China Mobile continues to pay attention to equity investment, give play to the role of capital “value contribution, ecological construction and industrial investment synergy”, strengthen the dual line model of “direct investment + fund”, strengthen the strategic layout in key areas, and build a digital intelligence industry ecosystem through the dual connection of “industry + capital” China Telecom Corporation Limited(601728) continues to expand in mobile communication, smart home and other fields. At the same time, Tianyi cloud carries out equity diversification reform, promotes the integration of cloud computing ecological resources, and enhances China Telecom Corporation Limited(601728) ‘s market expansion ability in the field of industrial digitization. We believe that at present, based on their basic resource advantages such as cloud computing and IDC, Chinese operators accelerate business expansion and build a new ecosystem through equity investment, industrial investment fund and other ways.
Suggested target: operators: China Mobile (covered), China Telecom Corporation Limited(601728) (covered), China United Network Communications Limited(600050) (covered); Solution provider: Zhejiang Dahua Technology Co.Ltd(002236) , Hangzhou Hikvision Digital Technology Co.Ltd(002415) .
Risk tip: the development of cloud computing business of operators is not as expected; The business expansion of operators is less than expected; The progress of non-public offering was less than expected.
