\u3000\u3000 Neusoft Corporation(600718) (600718)
The company will achieve rapid growth in performance in 2021, and the performance statement of the company will be significantly improved after the listing of subsidiaries
The company's performance in the first three quarters of 2021 has reversed the downward trend in 2020. In the first three quarters of 2021, the company achieved an operating revenue of 5.321 billion yuan, a year-on-year increase of 24.71%, and a net profit attributable to the parent company of 92 million yuan, a year-on-year increase of 31.47%. Looking forward to the future, Neusoft Corporation(600718) subsidiaries Neusoft medical and Neusoft Xikang plan to be listed on the Hong Kong stock exchange. Because the subsidiaries are in a period of rapid development, a large amount of R & D investment has great pressure on the net profit. Neusoft medical and Neusoft Xikang are expected to significantly improve the company's performance statements after their independent listing.
With the trend of intelligence and networking, automotive electronics business has ushered in rapid development opportunities
Under the trend of automobile intelligence and networking, the company's automotive electronics business is expected to achieve leapfrog development by virtue of product, R & D and channel advantages. The average annual compound growth rate of China's Internet of vehicles market in the next five years (2021-2025) is about 20.07%, and it will reach US $89.8 billion in 2025. Neusoft is the world's leading supplier of automotive electronic products and services. After nearly three decades of accumulation and development, Neusoft is in a leading position in technology and market share in the field of automotive electronics business. The company has established long-term cooperation with many Chinese international auto manufacturers and international auto electronics manufacturers. 85% of the world's top 30 auto manufacturers use Neusoft's software and services. Neusoft Ruichi, a former subsidiary of the company, is one of the few full stack solution providers in the field of commercial vehicle ADAS in China, which has developed from hardware (camera, domain controller), basic software platform and functional application. The commercial vehicle customers that have been pre installed and mass produced include Faw Jiefang Group Co.Ltd(000800) , Dongfeng, Shaanxi Automobile, Futian, Daimler, Jianghuai, Hongyan and several leading commercial vehicle enterprises in China.
Under the background of vigorous construction of smart city, the company has the ability to provide information solutions for multiple scenarios
We are optimistic about the comprehensive layout of the company's multi scenario information solutions in human resources and social security, housing management, transportation, environmental protection and so on under the background that local governments vigorously promote the construction of smart cities. In 2022, China's smart city will usher in rapid development. According to IDC statistics, smart policing, smart transportation and smart government account for a large proportion of the total ICT investment in 2021; Digital planning, smart emergency response, smart government and smart environmental protection will grow rapidly in the future. The cagrs from 2021 to 2025 are 25.71%, 24.41%, 22.79% and 19.65% respectively. It is expected that the transportation industry will become a new growth level of urban economic development, and there is also a broad future market space in the fields of emergency, environmental protection and smart community. The company has previously participated in the construction of smart application systems in more than 200 central cities across the country, serving more than 4000 government users and 20 million enterprise users. The company's future urban solutions will be oriented to digital government, medical and health care, people's livelihood security, education for all, public transportation, humanistic living environment, public safety, industrial development, etc.
Investment suggestion: it is estimated that the company will achieve an operating revenue of RMB 8.956 billion, RMB 10.568 billion and RMB 12.259 billion in 2021 / 22 / 23, and the net profit attributable to the parent is expected to be RMB 331 million, RMB 450 million and RMB 592 million in 2021-2023. It is covered for the first time. The target stock price is predicted to be RMB 24.35 by taking the average value of pe-ps, and is given a buy rating.
Risk tip: the development of intelligent vehicles and networking is less than expected, the progress of smart city is less than expected, the iterative ability of the company's technology is less than expected, and the progress of the company's big health business is less than expected.
