Baoxin Software (600845): The acquisition of Wuhan Iron and Steel’s industrial technology software continues to increase
Investment Highlights Announcement Summary: The company’s board of directors approved the “Acquisition of WISCO Industrial Technology Group Equity and Related Party Associated Transactions”.
Acquired 100% equity of Wuhan Iron & Steel Engineering Technology Group Co., Ltd. held by Wuhan Iron and Steel Group Co., Ltd. for $ 9.2 billion.
WISCO Group is a related company of the company, and this transaction constitutes a related party transaction.
Acquisition of Wuhan Iron and Steel Information Technology Subsidiary to supplement human resources and increase regional market share.
WISCO Industrial Technology is a wholly-owned information technology subsidiary of WISCO Group. Its main business is software development, information services, software extension projects and system integration projects.
As of December 31, 2018, the total assets of WISCO Industrial Technology12.
24 trillion, total debt 8.
9.3 billion, net assets 2.
830,000 yuan; 2018 operating income3.
8.4 billion, net profit -2.
After the merger of Baowu Group, WISCO’s integrated information system must be unified with Baosteel, and its system upgrade has increased the scale of Baoxin’s software business.
The issue effectively solved the problem of competition in the industry. By integrating with WISCO Industrial Technology in business and personnel, it reduced the cost of Baoxin Software’s related business in Wuhan and helped Baoxin Software increase its regional market share.Strengthen 夜来香体验网 regional markets and improve customer experience.
By improving the overall technical capabilities and management level of WISCO’s industrial and technical team, we expect its initial business unit to turn a profit this year.
Baowu Group continued to integrate acquisitions, and Baoxin Software became a leader in smart manufacturing.
After Baowu’s merger, it recently acquired Magang for the first time.
According to the data of the China Iron and Steel Association, the crude steel output of Baowu and Maanshan Iron and Steel Group in 2018 were 6,743 meters and 1964 meters, respectively, with a total of 8707 joints.The gap has further narrowed.
According to the Baowu Group’s capacity planning roadmap, a steel boutique and intelligent manufacturing service provider with a production capacity of nearly 100 million tons built 佛山桑拿网 in 2021 will be expected to become the world’s largest steel group.
Baoxin Software focuses on promoting the optimization and upgrading of manufacturing of iron and steel enterprises. It has the largest market share in the steel field in products and services such as MES, EMS, cold rolling, operation and maintenance services.
The company’s steel informatization market share will be transformed into the promotion of Baowu Group, and will be radiated to other industries.
R & D funding in 2018 5.
5.1 billion, with R & D revenue accounting for 10.
07%, through increased research and development, actively explore the construction of a smart manufacturing system that integrates smart equipment, smart factories, and smart operations to help China’s manufacturing companies transform and upgrade and continue to maintain the leading system of smart manufacturing.
The annual report business plan clearly proposes that by seeking opportunities for mergers and acquisitions of leading enterprises in the industry, expand the scope of existing smart manufacturing businesses, benchmark the world’s advanced counterparts, and improve overall competitiveness.
The data center business is distributed to the national market.
The Shanghai Data Center planning guidelines were issued. In principle, the existing industrial areas outside the outer ring were selected. The scale of each project reached 3000-5000 and the PUE was less than 1.
3. The number of new racks will be controlled at 60,000 by 2020.
The reporting entity is required to have large-scale operation experience and long-term stable operation and service capabilities in Shanghai.
The fourth phase of the company’s Shanghai Baozhiyun IDC was gradually delivered as planned, and the total of the three phases of 300 million + standard cabinets will be successively delivered and operated, forming an output value of about 2 billion.
Baoxin Wuhan IDC Central District plans to build 18,000 20A cabinets in three phases. After completion, it will become the largest single-data and cloud computing center in Central China.
In 2019/2021/2023, we plan to invest about 2,000 / 6,000 / 10,000 standard cabinets.
Wuhan is the first step of the company’s IDC business out of Shanghai and into the country.
Core city data center customers have strong demand, but the indicators are strictly controlled. Core cities have sustainable and stable load conditions, land consumption costs, large-scale, and centralized data center location will become scarce resources.
We expect that the company will combine Baowu Group’s resource advantages and its own technology operation capabilities to conduct business expansion around Shanghai and other core cities.
Investment suggestion: Baoxin Software is a leader in steel informatization and a leading manufacturer of smart manufacturing to help China’s manufacturing industry transform and upgrade.
Break through the advantage of scarce resources of Baowu Group and its own informatization capabilities, rapidly develop IDC business, and become the leader of third-party data centers in East China and even the country.
As a pioneer in the reform of Shanghai’s state-owned enterprises, implement a long-term equity incentive mechanism to stimulate corporate vitality.
We expect the company’s net profit for 2019-2021 to be 8.
5.1 billion / 11.
2.7 billion / 14.
2.4 billion, EPS is 0.
97 yuan / 1.
28 yuan / 1.
62 yuan, maintain “buy” investment rating.
Risk reminder events: Risks that exceed the expected risks in the construction of information technology investment in the steel industry.