Event: on May 20, the leading group office for the prevention and control of novel coronavirus pneumonia in Shanghai issued the implementation plan for the city to continue to consolidate the achievements of epidemic prevention and control and orderly return to work, requiring “enterprises to return to work and return to production through site code or digital sentry, and timely monitor and find abnormal personnel information”.
“Digital sentry” is expected to become the infrastructure in the post epidemic era, and the whole country is about to roll out: “digital sentry” is a hardware device with the functions of rapid verification of health code, ID card and nucleic acid detection information. It is also known as “health verification all-in-one machine”, which can complete the inspection and passage in only a few seconds. 1) Shenzhen, in February this year, the Shenzhen epidemic prevention and control headquarters issued the “emergency notice on using the health code automatic scanning system to strengthen the enclosure management”, requiring “all districts to install the health code automatic scanning system at the entrance and exit of each enclosure community”. In the “notice on doing a good job in the application of” electronic sentinel “in schools”, it is required to “further do a good job in the application of electronic sentinel in schools”. As of early March this year, more than 10000 sets of “electronic sentinels” had been put into use in Shenzhen. 2) In Shanghai, in April this year, the Shanghai prevention and control office issued the notice on comprehensively promoting the use of “place code” and health verification all-in-one machine in key commercial places in the city, and decided to implement the code scanning measures of “place code” and “health verification all-in-one machine” in the whole city from April 5, 2022. On April 10, the press conference on epidemic prevention and control in Shanghai said that the “digital sentry” would be used for the normalized management of the epidemic. According to the data of Shanghai big data center, as of early May, 6656 “digital sentinels” had been deployed in the city, and all Carrefour stores in Shanghai had been equipped with “digital sentinels” and location codes. In addition to commercial enterprises, government departments and financial institutions were also conducting the testing and bidding of “digital sentinels”. 3) At present, Beijing, Guangzhou, Dongguan, Zhuhai, Xiamen, Kunming, Ningbo and other places have successively issued policies or actually launched the deployment of “digital sentry”. Under the normalized prevention and control of the epidemic, the “digital sentry” is about to be launched nationwide, and Shanghai is expected to take the lead.
In this round, the hardware equipment of “digital sentry” in Shanghai has a new demand of 5 billion, with a potential scale of 50 billion nationwide: 1) quantity: nationwide, the key places of “digital sentry” include shopping malls and supermarkets, bars and restaurants, entertainment places, service places, commercial complexes, hotels, schools, communities, medical institutions, factories and enterprises, airports, etc., and most UnionPay merchants are covered, According to the estimation of the number of UnionPay merchants, by the end of 2021, there were about 28 million UnionPay inter-bank payment system online special merchants. Assuming that the penetration rate of the national “digital sentry” is 30% – 50%, each scenario is equipped with one, plus other demand scenarios except UnionPay merchants, the total demand is about 10-20 million. In Shanghai, referring to historical data, assuming that the number of online special merchants of Shanghai UnionPay inter-bank payment system accounts for 5.5% of the whole country by the end of 2021, there are 1.54 million UnionPay merchants in Shanghai by the end of 2021. Considering that the Shanghai municipal government implements “the city implements the integrated machine of location code and health verification”, it is estimated that the penetration rate of Shanghai “digital sentry” will be higher than that of the whole country, assuming that it is 60% – 80%, and one for each scenario, In addition to other demand scenarios except UnionPay merchants, the total demand is about 1-2 million units. 2) Unit price: according to the bid winning results of the government procurement network and the selling price of the online shopping platform, it is estimated that the unit price of the handheld “digital sentry” is about 22004000 yuan / set, and the unit price of the vertical is 7 Tcl Technology Group Corporation(000100) 00 yuan / set. It is assumed that the purchase ratio of the handheld and vertical is 7:3. 3) Market scale: it is conservatively estimated that the market scale of “digital sentry” in Shanghai is about 5 billion yuan, and the market scale of “digital sentry” nationwide is about 50 billion yuan.
Investment suggestion: “digital sentry” is divided into front-end identification equipment and back-end management and control platform. According to the division of software and hardware, it is recommended to pay attention to two investment opportunities: 1) terminal equipment, which has a large elastic expectation of direct performance, and it is recommended to pay attention to Urovo Technology Co.Ltd(300531) (the company’s “digital sentry” products have been promoted and sold in Shanghai, Shenzhen, Guangzhou, Jiangsu, Shandong, Sichuan, Zhejiang and other places, and tens of thousands of units have been shipped in the early stage) Winner Technology Co.Inc(300609) (the first batch of qualified service providers of “digital sentinel” in Shanghai big data center), Shenzhen Jieshun Science And Technology Industry Co.Ltd(002609) (the company’s “digital sentinel” products have been promoted and sold in Shanghai and Shenzhen). 2) After the platform is built, there are certain advantages in government related business development. It is suggested to pay attention to Beijing E-Techstar Co.Ltd(300513) (a subsidiary of Shenzhen smart city, which undertakes the construction of the “electronic sentinel” project of Shenzhen Municipal Government) and Wonders Information Co.Ltd(300168) (the first batch of qualified service providers of “digital sentinel” of Shanghai big data center).
Risk analysis: the promotion of “digital sentry” in the country is less than expected, and the market competition is intensified.
