\u3000\u3000 Ygsoft Inc(002063) (002063)
It has been deeply engaged in large-scale enterprise management informatization for more than 30 years, and the power industry has accumulated profound experience. Founded in 1998, the company provides software, hardware and services for the information and digital transformation of large enterprises. At the beginning of its establishment, the company took serving the power group as the strategic development direction and expanded to the whole business and field of the group’s management with financial informatization as the starting point. Based on the deep understanding of the energy industry and the mastery of information technology, in 2020, the chairman clearly focused on the strategic direction of the group’s management, smart energy, smart IOT and digital society.
State Grid e-commerce is the only holding listed company, and equity incentive injects power. The company has a deep background in the power industry. In the early stage of its establishment, the State Grid provincial company (Fujian and Jilin) and Gd Power Development Co.Ltd(600795) development immediately took shares. In 2019, the State Grid e-commerce transferred the shares held by the State Grid Fujian and State Grid Jilin and increased its holdings through the secondary market. Now it holds 13.25% of the equity of the company, acting in concert with Chen Lihao (Chairman) and Huang Xiaohua (president), In total, it controls the voting rights of about 23.37% of the shares of the company. The company is the only listed company controlled by State Grid e-commerce. At present, it has realized the full module application of DAP in State Grid e-commerce, established a model for the localization of core business system, and is expected to continue to participate in the localization process of power grid digital transformation. In addition, at the end of 2021, the company launched an incentive plan to grant stock options to core employees, accounting for 2.59% of the total share capital on the announcement date, the exercise price is 8.51 yuan / share, and the performance evaluation conditions for 22-24 years are 1) roe ≥ 7.9% and not lower than the 75th percentile of the benchmarking enterprise; 2) CAGR ≥ 11% compared with 2020, and not lower than the 75th percentile value of benchmarking enterprises; 3）△EVA＞0。 Equity incentive binds the interests of core employees, reflects the company’s confidence and injects development power.
The group’s management business is rich, and the State Grid Zhongtai construction is expected to become a new round of growth point of the company. From 2006 to 2010, the company’s revenue increased explosively, with 4y-cagr reaching 40%, mainly due to its deep participation in the SG186 information project of the State Grid and the provision of solutions for the group’s financial control system. In 2021, the construction of State Grid financial center was launched and piloted in Zhejiang Jinhua power supply company. It is planned to be launched within the scope of State Grid Zhejiang power by the end of January 22, and will be fully promoted in the State Grid Corporation of China in the future. The power grid industry chain has a huge organizational structure and complex business lines. The company has served the power group for more than 30 years and has profound industry accumulation. In the new round of power grid digitization and information technology localization, the company is expected to deeply benefit from the comprehensive promotion of the financial center in the power grid and power grid industry chain. In addition, the company has promoted the construction of key projects in fund management, tax management, smart archives, smart business travel and other aspects. DAP has been fully modular applied in State Grid e-commerce and is a benchmark for localization.
“Double carbon” superimposes “new infrastructure”. The construction of new power system with new energy as the main body and power market-oriented reform have brought huge incremental market space for power informatization. The company’s in-depth layout in the field of smart energy is expected to fully benefit. Under the background of “double carbon”, a large number of new energy grid connected drives the construction of new power system. The demand for grid connected consumption of new energy brings the demand for incremental information construction of power system in the whole link of “source, network, load and storage”. The company’s smart energy business has in-depth layout of power side carbon asset management products, fuel intelligent management products, grid side asset life cycle management products and various distribution network intelligent solutions; Load side integrated energy service platform, demand side response management, power transaction settlement and other all link information fields, and each product line has successful implementation cases. We believe that the company is expected to fully share the huge market dividends brought by the construction of new power system and power marketization reform by virtue of the advantages within the State Grid system, superimposing the know-how barriers in the power industry, the company’s high R & D investment and the layout advantages of the whole link product line.
First coverage and “buy” rating: we believe that as a leading manufacturer in the field of power informatization in China, the company is expected to fully benefit from the power informatization market dividends brought by the construction of new power system and power marketization reform. It is estimated that the EPS from 2021 to 2023 will be 0.24/0.30/0.37 respectively, and the corresponding PE will be 41.9/29.6/24.5 times respectively. 42 times PE valuation in 2022, corresponding to a market value of about 17 billion yuan.
Risk tips: 1 The construction progress of new power system is less than expected; 2. The progress of power market reform is less than expected; 3. The cooperation progress of controlling shareholders is less than expected; 4. The digital transformation of the power industry has not progressed as expected.
