Baoxin Software (600845) First Coverage In-Depth Report: Double Leader with High Growth and Certainty

Baoxin Software (600845) First Coverage In-Depth Report: Double Leader with High Growth and Certainty

Investment Logic is a domestic steel information leader and a third-party IDC leader. Both core businesses are in an upward cycle.

Since its establishment, the company has cultivated in the field of steel information for more than 40 years. It has only absolute business advantages in this field, and is the first brand of domestic steel information and automation.

Since 2013, the company has begun to use the advantages of 杭州桑拿网 shareholder resources to actively deploy IDC business. By the end of 2018, the IDC revenue has exceeded 1 billion US dollars, and the number of planned cabinets has reached 2.

650,000 aircraft, is one of the domestic third-party IDC leading companies.

Benefiting from the prosperity of the industry and its own resources, brand and other advantages, the company’s IDC business and steel information business are in an upward cycle, with long-term development and room for growth and high certainty.

We estimate that the company’s IDC business revenue growth rate will be 39 in 2019-2021.

6% / 34.

5% / 19.

9%, software development business (including iron and steel information) revenue growth rate of 21.

9% / 19.

9% / 18.


The IDC business has resource advantages, contributes to stable profitability and cash flow, and has great room for future growth.

The rapid development of the domestic IDC industry, driven by cloud computing, will continue to be in a high prosperity phase for a long time to come.

Due to downstream demand distribution and policy constraints, IDC resources in first-tier cities are relatively scarce.

Relying on Baosteel, a major shareholder, the company develops IDC business in Shanghai and obtains land, hydropower and other resource advantages. It can achieve rapid delivery of cabinet resources and maintain a high gross profit margin.

The company has implemented four IDC projects, with a contract rate of 100% and a minimum contract period of ten years. The availability rate is guaranteed, and it is expected to contribute 19 to full production.

3.8 billion in revenue, 7.

3.4 billion net profit before tax.

In the future, the company will continue to expand IDC resources in Shanghai, and it is expected to expand in different places in Wuhan, Nanjing, Shenzhen and other places.

The software development business fully benefits from the informatization of the steel industry and the internal needs of Baowu Group, with high growth certainty.

The company’s market share in the field of steel MES exceeds 50% (the company’s official website data), and the industry is outstanding.

The steel industry’s recovery in profitability and increasing concentration will help to boost the expectations of steel companies’ informatization expenditures, and the company as a steel informatization company will fully benefit.

In addition, the informatization demand generated by Baowu Group due to mergers and acquisitions integration and intelligent transformation has brought a large number of orders to the company, which is a strong support for the company’s software development business.

Relying on Baowu Group’s industry level and internal resource advantages, the company’s steel information business development is even more deterministic.

The value assessment and investment recommendations are expected to achieve net profit attributable to the mother from 2019 to 2021.



RMB 790,000, EPS0.



21 yuan, currently corresponding to PE 47.



2 times.

With reference to the company’s 2015-2019 PE-Band and comparable companies’ assessments, the company will be given 42x PE in 2020, corresponding to a target price of 42 yuan, with a “buy” rating for the first time.

Risks suggest that Internet vendors ‘IDC demand is less than expected; the steel industry’s informatization expenditure is less than expected; the company’s IDC construction rhythm is uncertain; and the proportion of connected transactions is too high.