\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 845 Shanghai Baosight Software Co.Ltd(600845) )
Event: on April 27, 2022, the company released the first quarterly report of 2021. In Q1 of 2021, the company achieved a revenue of 2.498 billion yuan, a year-on-year increase of 23.76%, a net profit attributable to the parent company of 455 million yuan, a year-on-year increase of 12.68%, a deduction of non attributable net profit of 441 million yuan, a year-on-year increase of 20.03%, and an operating net cash flow of 1.046 billion yuan, a year-on-year increase of 141.31%.
Comments:
Less affected by the epidemic, the company has made a comprehensive layout of high-end automation products and steadily promoted its business
In the dual carbon era, the company, as an information high-tech company under the central enterprise and a domestic software provider, has deeply implemented national strategies such as "new infrastructure", "industrial chain security" and "independent and controllable", continued to increase R & D investment around the localization of key core technologies to replace and solve the "neck" problems of the industry, comprehensively promoted the large-scale and industrialized development of domestic independent and controllable high-end control systems, and enabled the intelligent industry.
In terms of informatization and automation, the company has expanded from MES, ERP, Bi and other industrial software to large-scale PLC in the metallurgical industry. Large-scale PLC in the metallurgical industry has high threshold and great difficulty. As the first enterprise to layout large-scale PLC in China, the company has fully proved that it has reached China's leading level in the field of industrial control and intelligent manufacturing. At the same time, it plans to develop domestic SCADA software for distributed whole process in the metallurgical industry within this year and form a pilot application, In the future, there will be a large space for vertical and horizontal expansion; In terms of industrial Internet, the company independently researched and developed xincube platform, promoted the development of relevant components of industrial Internet platform, and successively released data middle platform, business middle platform and artificial intelligence middle platform during the year; In terms of IDC, the company is actively promoting the construction of computer rooms in major bases such as Shanghai and Xuanhua.
The gross profit margin is stable and the profitability is strong
The overall gross profit margin of Q1 of the company in 2021 was 32.42%, which was relatively stable, reflecting the strong profitability of the company. In the future, with the continuous expansion of the company's "soft to hard" integrated layout, the intelligent manufacturing business with automation, informatization and industrial Internet platform as the core is expected to bring greater room for improvement to the gross profit margin of the company's software development business. At the same time, under the dual carbon policy, The scarcity of IDC room resources in the core area of the company is becoming increasingly prominent, and the profitability is expected to continue to improve.
Release large PLC in metallurgical industry, and intelligent manufacturing leader is ready to go
After ten years of research and development, the company officially released large PLC products in the metallurgical industry. We believe that the release of Baoxin PLC products has great strategic significance, which means that Baoxin has gradually transformed into a leading enterprise of intelligent manufacturing. There are two main reasons why the market did not recognize the company's industrial software valuation before: 1) the company is mainly backed by Baowu and iron and steel industry. The market believes that the market is relatively single and the market space has a ceiling; 2) The company's industrial software is mainly MES, Bi, ERP, etc. the market has questioned the company's industrial software ability.
We believe that the release of Baoxin's large-scale PLC products is equivalent to proving that the company has reached a leading level in the field of industrial control / industrial software in China. From two dimensions: 1) the threshold of large-scale PLC is high: large-scale PLC has very high requirements for stability. In addition to the technical difficulties, whether customers are willing to accept it is very important. The market share of China's large-scale PLC is basically in the hands of Siemens, Schneider and other European and American enterprises, The development of PLC industry is relatively mature. General enterprises are unwilling to replace PLC easily because of business stability. For Baoxin, Baowu has become a natural customer for the development of Baoxin PLC products. After ten years of testing and verification, Baoxin has created its unique competitive strength; 2) High threshold of PLC in iron and steel metallurgy industry: in all industries, the requirements of PLC in iron and steel metallurgy industry for accuracy and stability rank among the top. For Baoxin, being a PLC in iron and steel metallurgy industry means having the strength of cross industry expansion. The release of large PLC in Baoxin iron and steel industry is a proof of its own industrial software strength. In the future, the company will have a large space for "vertical and horizontal" expansion, continuously expand its product series vertically and expand across industries horizontally. We believe that Baoxin intelligent manufacturing valuation needs to be reshaped urgently, and there is a large space for profit + valuation improvement in the future.
The industrial Internet business continues to advance, and the core benefits from the promotion of the "carbon neutrality" strategy
Backed by China's largest iron and Steel Group, the company is the software leader of China's iron and steel industry. Since 2016, the iron and steel industry has gradually recovered and the overall profitability has been continuously improved, making the steel enterprises have the ability to transform the original information and automation systems; At the same time, the pace of M & A and reorganization of Baowu is accelerating. With the transformation of 100 million tons of Baowu digital intelligence, the demand for informatization and automation is expected to continue to release; Under the background of "carbon neutrality", steel enterprises are facing great pressure of transformation and upgrading. In addition, steel enterprises are also able to invest capital expenditure to transform and layout the industrial Internet, so as to open long-term space for the company's industrial Internet business.
As early as five years ago, Baoxin established the industry 4.0 project department to advance the layout of industrial Internet technology. In December 2020, the company released the independently developed industrial Internet platform xin3plat, promoted the development of big data "5S" components, and completed the construction of iron making interconnected intelligent control platform (blast furnace) demonstration project; At the beginning of 2021, Baowu established China Baowu industrial Internet Research Institute and China Baowu big data center to work together with Baoxin to coordinate Baowu industrial Internet Framework Design and cutting-edge technology research and development.
Relying on the strong R & D strength accumulated in the field of industrial software and professional experience in the iron and steel industry for many years, the company independently developed the industrial Internet platform and artificial intelligence platform, and actively built the industrial Internet Ecosystem of the iron and steel industry with iplat and eplat as the two wings, opening up a new growth track and broader development space for future development. In 2021, Baoxin industrial Internet platform continued to be shortlisted as the "double span" platform of the Ministry of industry and information technology, and its ranking increased steadily; The platform won the honors of one of the first batch of China's most advanced digital maturity iomm excellence certification, one of the first batch of four enterprises of "five-star platform for service security evaluation of industrial Internet platform", and the runner up of the third China Industrial Internet competition. The company's industry status, market competitiveness, independent innovation ability and brand strength continued to improve.
IDC has a unique ability endowment. It is located in the core area of the country and has full expansion potential
In the Shanghai Baosight Software Co.Ltd(600845) in-depth report "interpreting the long-term deterministic value of the new infrastructure leader from three major Expectation Differences", we clearly emphasize that the market usually attributes the single reason for Baoxin's success in IDC to resource endowment. We believe that the market does not fully recognize the company's unique IDC capability, which is mainly reflected in the combination of "resource endowment + industrial software capability". 1) From the perspective of resource endowment: backed by Baowu, the company has unique resource advantages in land, water, electricity and energy consumption acquisition; 2) From the perspective of industrial software capability: the company is the only enterprise in the market to undertake all the tasks independently, including design (with independent Meishan Design Institute), construction and operation (the only enterprise in the market that conducts comprehensive independent research and development of informatization and automation in the IDC field). It is endowed with excellent cost control ability and strong operation and maintenance ability. The company's computer rooms are high-quality computer rooms, which have been praised by the Shanghai municipal government Highly affirmed by upstream suppliers and downstream customers. The company has clear strategic development ideas, adheres to the self built model, continues to expand diversified high-quality customers in the front line, and appropriately develops the base business of key customers, with strong expansion potential and profitability.
Profit forecast and investment rating
As a hard technology leader with scarce in-depth layout of "intelligent manufacturing + industrial Internet + IDC cloud computing" in China, the company has strong long-term growth certainty and is firmly optimistic about the company's long-term development space. It is estimated that the net profit of the company from 2022 to 2024 will be 2.234 billion yuan, 2.938 billion yuan and 3.894 billion yuan respectively. The current share price corresponding to PE is 30.07 times, 22.87 times and 17.25 times, maintaining the "buy" rating.
Risk factors
IDC construction and launch fell short of expectations, Baowu restructuring and M & A fell short of expectations, and 5g development fell short of expectations
