Event: on January 6, 2022, the national development and Reform Commission released the plan for promoting national government informatization in the 14th five year plan (hereinafter referred to as the “plan”) on the official website.
Xinchuang industry is expected to enter a new stage of development. From 2020h2 to 2021, the overall attention of the Xinchuang sector is low, and the related objects have experienced the downward stage of valuation. We believe that the main reason is the market’s consideration of uncertainty about the intensity and rhythm of relevant planning in the next 3-5 years, especially considering the financial pressure brought by epidemic prevention and control expenditure, which affects the judgment of Xinchuang promotion progress. On January 6, 2002, the “plan” was issued, which clearly pointed out that “we should comprehensively improve the digital, networked and intelligent level of government governance. We should accelerate the transformation of government functions, strengthen the innovative application of new technologies, promote the reengineering of government governance process and model optimization, and constantly improve the scientificity of decision-making and administrative efficiency”, Xinchuang industry is expected to enter a new stage during the 14th Five Year Plan period.
There is still room to repair the valuation level of Xinchuang target. Based on the performance publicly disclosed in the 2020 annual report, we discussed the corresponding 22-year valuation multiple assuming that the performance in 2022 increases by different percentage compared with that in 2020 (Note: it is only the comparison of different hypothetical growth ranges and does not indicate the direct profit forecast). We believe that, on the whole, if the performance growth is achieved in 2022, there is still some room to repair the valuation level of the Xinchuang sector.
Domestic software and hardware ecology is growing, which is expected to produce scale effect and cluster effect. Huawei’s three basic open source communities: Gauss, Euler and Hongmeng have begun to accumulate corresponding ecological partners and typical industrial landing cases. We believe that this is actually the epitome of the gradual development of the whole domestic software and hardware industry towards scale, standardization and clustering. We believe that the “14th five year plan” period will be an important stage for the further promotion of Xinchuang strategy, and the ecological environment of domestic basic software and hardware is expected to continue to improve. Moreover, under the guidance of relevant policies, after early exploration and accumulation, the domestic software and hardware industry has formed an overall promotion situation: the performance of domestic chips is strong enough, and a number of excellent domestic enterprises have emerged in middleware, database, office software and industrial application software, which is expected to move towards large-scale and cluster development in the future.
Investment proposal and investment object
It is suggested to pay attention to the leading enterprises in various subdivided fields of Xinchuang. Domestic middleware: Beijing Tongtech Co.Ltd(300379) (300379, not rated), Beijing Baolande Software Corporation(688058) (688058, not rated); Domestic database: Beijing Vastdata Technology Co.Ltd(603138) (603138, not rated); OA system: Shanghai Weaver Network Co.Ltd(603039) (603039, not rated), Beijing Seeyon Internet Software Corp(688369) (688369, not rated); Domestic server and CPU related: Dawning Information Industry Co.Ltd(603019) (603019, buy).
The implementation and promotion speed of risk warning policies were lower than expected, the macro-economy was depressed, and the progress of epidemic prevention and control was lower than expected
