\u3000\u3000 Beijing United Information Technology Co.Ltd(603613) (603613)
Key investment points
Event: the State Council issued the “14th five year plan” for digital economy development], and by 2025, the added value of core industries of digital economy will account for 10% of GDP.
The plan puts forward eight tasks, and the innovative development of industrial Internet is expected to accelerate. The 14th five year plan for the development of digital economy mentions eight major tasks, including optimizing and upgrading digital infrastructure, vigorously promoting industrial digital transformation, accelerating digital industrialization, etc; In terms of enterprises going to the cloud, the plan proposes: 1) promote the digital transformation of various industries; 2) Guide enterprises to strengthen digital thinking and steadily promote enterprises to the cloud. We believe that the plan is expected to continue to promote the development of industrial Internet. As one of the leading industrial B2B e-commerce enterprises, the company has a sound digital service system, or will fully enjoy the policy dividend. The future prospect is worth looking forward to.
The e-commerce penetration of industrial products has a large upward space. According to iResearch consulting data, in 2020, China’s industrial products market scale is 10.6 trillion yuan, and the B2B e-commerce market scale of industrial products is about 470 billion yuan, with an online penetration rate of 4.5%. It is expected that the market scale will reach about 1.75 trillion yuan in 2025 and 30% CAGR in the next five years. In the context of the continuous epidemic, some of the traditional offline distribution scenarios will be carried out online. At the same time, through the industrial e-commerce channel, it is conducive to enterprises to shorten the process cycle, improve quality and efficiency. Moreover, this model has high convenience and flexibility, and is optimistic about the upward space for the penetration of industrial e-commerce.
The horizontal and vertical two-way expansion of the industrial chain strengthens the advantageous position of the industry. 1) Horizontally, expand categories: the company has opened up multiple vertical industries and realized industry expansion by replicating the business model of Duoduo platform. The company has replicated Duoduo platform and proved feasible in practice. New Duoduo platforms such as Yiduo and Xinduo are now in the incubation stage; 2) Vertically, extension depth: the company extends up and down the single product industrial chain, will fully enjoy the development dividend period of large-scale industrial Internet market and low e-commerce penetration, go deep into vertical fields such as titanium industry, alcohol chemical industry, resin, base paper, chemical fertilizer, grain and oil, or further expand the competitive advantage and market share of single products.
During the construction of cloud factory, digital enabled enterprises reduce costs and increase efficiency. In 2020, the company proposed the “100 cloud factories plan”, and so far, more than 20 cloud factories have been gradually implemented; Cloud factory will promote the digital transformation of all links of upstream enterprises, help enterprises release production capacity and improve efficiency, and build an industrial ecological circle. At the same time, in terms of digitization, the company strengthened the construction and application of digital service systems such as cloud ERP, smart logistics, digital warehousing and industrial Internet, and significantly improved the digital driving capacity of various platforms.
Profit forecast and investment suggestions. According to the company’s performance forecast, it is expected to achieve revenue of 37.1 billion yuan to 37.4 billion yuan (+ 116.2% ~ 118%) and net profit attributable to the parent company of 571 million yuan to 576 million yuan (+ 87.4% ~ 89%) in 2021; We raised the profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 572 million yuan, 940 million yuan and 1495 million yuan respectively, with an annual compound growth rate of 70%, corresponding to 66 times, 40 times and 25 times of PE respectively. Considering that the e-commerce market of industrial products is broad and the penetration rate still has great room to improve, the company is China’s leading industrial B2B e-commerce platform, and has expanded several trading platforms, such as coatings, paper, glass, grain and oil. It has multi category competitive advantages in the industry and high performance growth. Considering the company’s historical valuation level and growth, we give the company 50 times PE in 2022, corresponding to the target price of 136.5 yuan, which is raised to the “buy” rating. It is recommended to pay positive attention.
Risk tip: industry policy risk, risk of intensified market competition, risk of customer transformation less than expected, risk of strategic promotion less than expected.
