\u3000\u3000 Unisplendour Corporation Limited(000938) (000938)
1. Event overview: the company received the notification letter from Ziguang group, and the manager of Ziguang group received the civil ruling served by Beijing No. 1 Intermediate People’s court. According to the civil ruling, the first intermediate people’s Court of Beijing ruled to approve the reorganization plan of the substantive merger and reorganization of seven enterprises such as Ziguang Group Co., Ltd.
2. Event comments: on December 30, the company announced that the strategic reorganization of indirect holding Ziguang group was unanimously approved by the creditor’s group, ordinary creditor’s group and investor group. According to relevant laws and regulations, the reorganization plan (Draft) can take effect only after being ruled and approved by the people’s court. In this announcement, the first intermediate people’s Court of Beijing ruled to approve the reorganization plan, It indicates that the debt restructuring of Ziguang group will enter the “countdown” stage. According to the restructuring plan, the war investment fund will be in place on March 31, 2022. The restructured enterprise will pay off its debts and pay the restructuring expenses within 6 months, and the debt crisis of Ziguang group will be resolved soon.
3. The core asset is the digital base of Xinhua three whole industry chain, and the industry position has been steadily improved: the company’s IT products include the whole industry chain of “core cloud network edge end” such as routers, switches, servers, storage, security, cloud computing and intelligent terminals; Products, solutions and services provide industrial digital empowerment for many industries such as government, operators, Internet, finance, education, medical treatment, agriculture, transportation, energy and manufacturing. The product capacity is the world’s leading, and the full stack solutions help accelerate the digital transformation of the industry.
4. The industry position has been steadily improved and the competitiveness is strong: according to IDC data statistics (disclosed in the semi annual report), the market share of many products of the company has further increased in 2021, and the market share of Ethernet switches in China has increased from 35% in the previous year to 38%, jumping to the first in the market; China’s enterprise network router market share increased from 30.8% in the previous year to 32.5%, ranking second in the market; China’s enterprise WLAN market share is 31.2%, ranking first in the market for 12 consecutive years; China’s x86 server market share rose to the second, from 15.4% last year to 16.8%; China’s non-x86 server market ranking jumped from the fourth place in the previous year to the first place, with a market share of 23.6%; China’s blade server market share reached 52.3%, continuously ranking first in the market; China’s storage market and China’s UTM firewall market share rank second in the market.
5. After the settlement of the group’s debt problem, there are optimistic expectations, including the improvement of incentive mechanism and governance structure. Driven by the digital economy, the company’s performance growth has high certainty, low valuation and high safety margin.
6. Investment suggestion: we are optimistic about the development of the company’s operators, smart city and overseas business, and maintain the profit forecast unchanged. It is estimated that the company’s revenue from 2021 to 2023 will be 66.45/75.39/86.76 billion yuan respectively, and the earnings per share will be 0.73/0.92/1.16 yuan / share respectively, corresponding to 24.37 yuan / share on January 17, 2022, and the closing price PE will be 33.2/26.4/20.9 times respectively, maintaining the “buy” rating.
7. Risk warning: covid-19 epidemic has led to high high price inventory of upstream chips; The group’s debt default solution is less than expected; The MEU list affects the company’s overall supply chain.
