Chinasoft International Ltd (CFTLF)

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GF Securities: Maintain China Software International (00354) "Buy" rating at a reasonable value of HK$15.6

source
https://cj.sina.com.cn/articles/view/5835524730/15bd30a7a020015hmh

December 29, 2021 10:19 Zhitong Finance APP

Zhitong Finance APP learned that GF Securities released a research report stating that it maintains China Software International (00354) "Buy" rating. It is expected that the net profit attributable to the parent will be 12.32/15.94/2.044 billion yuan in 2021-23, and the PE will be 20.2/15.6/12.1 times. , To 25 times PE valuation in 22 years, get a reasonable value of 15.6 Hong Kong dollars.

Company announcement: Transfer of 50.83% equity of Shenzhen Kaihong to Hongju Innovation for 76.25 million yuan; At the same time, Hubble, CCB Chinasoft International and Hongju Innovation have injected 200 million yuan into Shenzhen Kaihong. After the completion of the transfer and capital injection, the shareholding structure of Shenzhen Kaihong is as follows: the company holds 19.5%, Yixin Technology (behind Shenzhen State-owned Assets) holds 29.5%, Huawei Hubble holds 20%, and Hongju Innovation holds 31%. .

The main views of GF Securities are as follows:
Shenzhen Kaihong was established under the leadership of the company and introduced strategic investments such as Shenzhen SASAC and Huawei. The company's shareholding was reduced to 19.5%, which is mainly to facilitate Shenzhen Kaihong's follow-up and better development of credit and innovation business.

The shareholding of the Shenzhen SASAC and Huawei Hubble recognizes ChinaSoft International’s ecological capabilities in Hongmeng and can introduce industry resources. Chinasoft International can provide more in-depth services for AIoT, intelligence, and digitalization in various industries, and at the same time, it is actively promoting Hongmeng’s ecological development. Penetration and operation of various industries.

Shenzhen Kaihong is an important platform for the company to expand Hongmeng’s ecological incremental business. Shenzhen Kaihong is positioned as a research and development company with high-tech talents. It mainly produces Hongmeng OS release products. The ecological services (solutions and other services) based on this are mainly provided by Chinasoft International Wait for the company to complete it in collaboration.

With reference to the mobile operating system and ecological value experience, the value ratio of OS products and ecological services can reach 1:6 or even 1:10, and the space for ecological services is very large. Therefore, despite the decline in the shareholding ratio at the OS development level, it has brought about a larger ecological business. At the same time, since Shenzhen Kaihong's early-stage R&D investment expenditure is expected to be relatively large, the impact of non-consolidation on the financial burden of listed companies will also be relatively small. ChinaSoft International has launched strategic cooperation with leading industry customers in industries such as industry, finance, power, party and government, and developed an open source Hongmeng OS release.

The bank believes that the company maintains in-depth cooperation with Huawei and participates in more businesses to drive overall growth. At the same time, non-Huawei customers are growing rapidly. The cloud intelligence business is driven by the rapid penetration of Huawei Cloud and Hongmeng ecology, and has growth prospects.