\u3000\u3000 Shanghai Baosight Software Co.Ltd(600845) (600845)
Event overview
1) on December 30, 2021, the Ministry of industry and information technology announced the list of "innovative pilot application cases of industrial Internet platform in 2021", and a total of 140 application cases in six directions were selected in China. Shanghai Baosight Software Co.Ltd(600845) four innovative pilot application cases were shortlisted in the two directions of platform design and intelligent manufacturing, ranking in the forefront of the country.
2) in December 2021, Shanghai Baosight Software Co.Ltd(600845) successively assisted the opening and operation of rail transit lines in Shanghai, Nanchang, Wuhan and Nanning, and continued to expand the business ecology outside the steel circle by relying on the powerful integrated monitoring system and smart Metro solutions.
3) recently, Shanghai Baosight Software Co.Ltd(600845) said when answering questions on the investor interaction platform: Shanghai Baosight Software Co.Ltd(600845) smelting redundant PLC is expected to be developed in the second half of 2022, and Yunhua PLC is in the stage of relevant basic technology verification. Since Shanghai Baosight Software Co.Ltd(600845) released the self-developed large-scale PLC products in July 2021, the relevant work is accelerating. The company has vertically arranged the production control core software PLC, and the breakthrough in the "neck" technology field is worth looking forward to.
Five dimensional value brings four core growth drivers
Shanghai Baosight Software Co.Ltd(600845) is the leading target of cross domain and large market value of China's iron and steel informatization, industrial software, industrial Internet and IDC. We disassemble the company's deterministic investment opportunities from the five values of industry dimension, group dimension, company dimension, product dimension and growth dimension. There are four core points:
1) industrial change: the optimization and transformation of the iron and steel industry and green development bring great opportunities to Baoxin. The iron and steel industry is undergoing many historic changes, such as merger and reorganization, transformation and upgrading and "carbon peak and carbon neutralization". According to the State Council's iron and steel industry integration policy, by 2025, 60% - 70% of China's iron and steel industry will be concentrated in about 10 group enterprises. According to the data of the Ministry of industry and information technology, the CR10 share of the iron and steel industry was only 39.38% in 2020, so the industry concentration still has nearly doubled the growth space. The demand for information, intelligence, unity and transparency upgrading and transformation and payment capacity have been continuously improved, creating a historic opportunity for the company. On the other hand, Baoxin's informatization, automation and intelligent products and services have made great contributions to industrial optimization, transformation and green development.
2) group integration: Baowu's stock resources and new demand nourish the company on both sides of supply and demand. On the supply side, Baoxin uses and revitalizes the group's resources to develop the business territory of the data center. According to the official website, the company plans to build a data center with an overall scale of 50000 cabinets by 2023; IDC and cloud services, as the company's second growth curve, have become the basic indicators of digital economy and Baoxin's performance. On the demand side, Baowu group accelerated M & A integration and smart manufacturing, bringing huge demand for orders, which has greatly increased the income of related parties of the company in recent years. In 2020, the income from Shanghai Baosight Software Co.Ltd(600845) related party transactions was 3.781 billion yuan, a year-on-year increase of 27.18%, with a record growth rate. It is expected that the proportion of related party transaction revenue in revenue will remain high in the next 3-5 years.
3) digital intelligence drive: industrial software, industrial Internet platform and data center continuously consolidate the digital intelligence capability. Baoxin started and developed industrial software for many years, and has a deep accumulation in the fields of automation, informatization, digitization and intelligence. In 2020, it launched the industrial Internet platform xin3plat, which actively enabled the group's "one headquarters and multiple bases" management mode, which is expected to form a third growth curve and open a new industrial Internet blue ocean market.
4) horizontal and vertical expansion: extend intellectualization, sink key core technologies, and expand thousands of lines and industries. The company is exploring intelligent upgrading and benchmarking with Dahe iron and steel in the United States. The per capita steel production of Chinese iron and steel enterprises still has great room for improvement, thus bringing broad demand for intelligence. The company will strengthen self-control. Baoxin's self-developed PLC products are expected to unlock the "neck" technology and promote the domestic substitution of key industrial software. According to the industry data released at the press conference of Baoxin PLC, the total investment in the control system of the metallurgical industry exceeds 200 billion yuan, and there is a broad space for localization in the future. Out of Baowu, Baoxin has entered the steel market outside Baowu group, such as Angang, Lianyuan Steel and Japanese steel enterprises, reached strategic cooperation with Benxi Steel and undertook the production and marketing integration project of Shougang. Out of the iron and steel industry, Baoxin accounted for more than 50% of the revenue in other industries in 2020, and has successfully covered 18 cross cutting industrial applications such as transportation, medicine and nonferrous metals, with continuous expansion of business extension.
The self-developed xin3plat industrial Internet platform drives the digital intelligence transformation of the iron and steel industry
Shanghai Baosight Software Co.Ltd(600845) the research and development of a new generation of ecological technology platform based on industrial Internet architecture was launched as early as 2018. Xin3plat industrial Internet platform was officially released in 2020 and selected into the "2020 cross industry and cross field industrial Internet platform" of the Ministry of industry and information technology. In 2021, xin3plat successfully passed the first batch of the most advanced digital maturity iomm excellence certification in China. Four industrial Internet platform innovation application cases provided by Baoxin for Baowu big data center, Baosteel Group, Maanshan Iron and steel and Xiwang metal were selected into the list of "industrial Internet platform innovation pilot application cases in 2021". According to the official wechat disclosure of Baowu group, by the end of 2021, xin3plat had covered 26 first-class subsidiaries of the group, with a coverage rate of more than 80%. The number of devices covered by the platform exceeded 4.28 million, cloud software and industrial app7500 +, micro service 46000 +, industrial model 6700 +, and serving 290000 enterprise users. We believe that Baoxin xin3plat helps Baowu build "cross industry and cross base" interoperability and integration of "one headquarters and multiple bases" under the unified industrial Internet system architecture, realizes the coordination of professional management and original regional management, and further improves the management efficiency after M & A integration of the group.
Prospective self-developed large-scale PLC, breaking through the "neck" technology and leveraging the domestic alternative market
PLC system is not only the core product in the industrial control field, but also an important part of the industrial software production management and control layer. The market share has been dominated by foreign giants such as Siemens, Rockwell and Schneider for a long time, and the demand for independent control is urgent. Shanghai Baosight Software Co.Ltd(600845) since 2010, large-scale PLC products have been developed through school enterprise cooperation. Starting from the technologies related to steel rolling and high-speed control, the R & D team is accelerating the expansion. Yunhua PLC is in the verification stage of relevant basic technologies. It is expected to complete the R & D of smelting redundant PLC in the second half of 2022. In terms of market space, according to the disclosure of Baoxin PLC press conference, the cost of the PLC control system of a hot rolling production line in Baowu is more than 100 million yuan (Baowu group currently has 20 hot rolling production lines in service). Combined with its PLC deployment needs in other production processes such as ironmaking, steelmaking, hot rolling, thick sector, cold rolling, bar and wire rolling, energy and environment and new materials, Baoxin expects the total investment in Baowu group's control system to be 20 billion. In addition, at the press conference, Baoxin estimated that the total investment in the control system of the metallurgical industry would exceed 200 billion yuan, and there would be a broad space for localization in the future.
Based on the accumulation of automation, informatization and intelligence in the iron and steel industry, we will expand thousands of lines and industries horizontally
The company's intelligent business includes smart city and smart transportation. It is characterized by integrated management and control and integrated services, and takes its own software and hardware products as the core competitiveness to provide users with intelligent integrated solutions integrating "product engineering service" for urban construction related industries. According to the official disclosure of the company, on December 30, 2021, Shanghai rail transit line 14, whose automation level has reached the highest international standard of goa4, was put into operation. The comprehensive monitoring solution for rail transit full-automatic operation undertaken by Shanghai Baosight Software Co.Ltd(600845) was first applied in Shanghai rail transit line 14. The project team has completed the research and application of new technologies such as full-automatic operation scene linkage, on-board integrated monitoring, wireless transmission and signal integration in this line, forming the first on-board integrated monitoring system solution with independent intellectual property rights in China. In addition, Shanghai Baosight Software Co.Ltd(600845) "smart Metro 3 + 1 solution" in the newly opened Nanchang rail transit line 4, uses the actual layout of the station to overlay the three-dimensional modeling model to display the station scene, passenger flow distribution and key equipment information in real time; The station virtualization technology and quantum secure communication technology are applied for the first time in the newly opened Wuhan rail transit line 16.
Investment advice
We expect the company to achieve operating revenue of RMB 12.42/16.16/20.98 billion and net profit attributable to parent company of RMB 1.74/22.6/2.95 billion in 2021 / 22 / 23. Shanghai Baosight Software Co.Ltd(600845) its own strength is excellent, and it is located in multiple high-quality tracks, with high visibility and strong certainty for future growth. Maintain the investment rating of Buy-A and give a six-month target price of 77.68 yuan, which is equivalent to 40 times the dynamic P / E ratio in 2023.
Risk warning: the impact of asset restructuring; IDC cabinet construction, shelf availability and future demand are less than expected; The promotion of industrial Internet platform was less than expected.
