\u3000\u3000 Zhejiang Daily Digital Culture Group Co.Ltd(600633) (600633)
Key investment points
Event: the State Council issued the 14th five year plan for the development of digital economy, which defined the guiding ideology, basic principles, development objectives, key tasks and safeguard measures to promote the healthy development of digital economy during the 14th Five Year Plan period. The plan points out that by 2025, the added value of core industries of digital economy will account for 10% of China’s GDP.
The digital government affairs of the company conform to the goal of improving the digitalization level of public service: the plan points out that we should improve the efficiency of “Internet plus government service”. Improve the digital and inclusive level of social services; Promote the integrated development of digital urban and rural areas; Create a new digital life of wisdom sharing. The company has deeply participated in the construction of digital government and smart city in the province, such as “urban brain”, “digital Zhejiang” and other smart cities and digital government construction, and deepened the construction and operation of relevant R & D, operation and application scenarios of urban brain in Hangzhou, Wenzhou, Taizhou, Yiwu, Anji and other cities; At the same time, we will fully participate in the construction of key tasks such as the overall intelligent governance and comprehensive application of Party and government organs and the comprehensive application of digital government. The company’s digital government business is expected to further deepen in the rapid development of digital economy.
Fuchun cloud data center of the company helps upgrade the infrastructure of digital industry: the plan points out that it is necessary to accelerate the construction of information network infrastructure and orderly promote the expansion of backbone network; Promote the digital transformation of infrastructure; Promote cloud network collaboration and arithmetic development. The construction of Fuchun cloud data center of the company continues to advance, and the existing 6700 groups of cabinets are expected to increase steadily in the next three years. In the context of upgrading the infrastructure of the digital industry, the construction of the company’s data center is expected to enjoy more dividends.
Digital technology and digital culture work together to establish the company’s leading edge in the digital industry. In terms of digital entertainment, Zhejiang Daily Digital Culture Group Co.Ltd(600633) has built up the digital entertainment industry circle with winger holding as the core, and continuously nurture and improve the layout of digital sports. Based on Zhejiang Art Industry Group, we build “Internet plus art” development platform, improve the digital culture ecology of the company, and support the company’s performance stability and growth. In terms of digital technology, Zhejiang Daily Digital Culture Group Co.Ltd(600633) has gradually built a digital technology industry segment including data technology, digital intelligent governance, financial media technology, digital culture and tourism and other subdivided fields to improve the company’s sustainable development ability.
Profit forecast and investment suggestions. It is estimated that the EPS in 2021-23 will be 0.46 yuan, 0.56 yuan and 0.60 yuan respectively, and the corresponding PE will be 19 times, 15 times and 14 times respectively. We believe that the company has fully completed the transformation from traditional media to Internet company, and will focus on the layout of digital culture and digital technology industry in the next stage. In terms of performance, the leisure and entertainment sector led by the winger ranks the top in China, and actively goes to sea to create a new growth pole; The construction of Fuchun cloud data center has been continuously promoted, with strong performance certainty. In terms of valuation, the company’s Internet positioning switching and meta universe business layout may bring a certain valuation premium to the company. In conclusion, we maintain the “buy” rating.
Risk tip: risk of policy change; The risk of intensified market competition; There is a risk that the water flow of Xinyou is less than expected.
