China Software (600536) Company Research: Establish a joint venture with China Electronics to overweight the Fei Teng + Kirin system ecosystem

China Software (600536) Company Research: Establish a joint venture with China Electronics to overweight the “Fei Teng + Kirin” system ecosystem

Event: The company’s subsidiary Chinasoft Systems plans to co-invest with China Power (Hainan) Digital Technology Industry Group Co., Ltd. to establish the China Power (Hainan) Joint Innovation Research Institute Co., Ltd., with the registered capital of the target company at USD 500 million, of which ChinasoftInvested 95 million yuan, accounting for 19% of the registered capital.

Established a joint venture with China Electronics to accelerate the development of the “Feiteng + Kirin” system.

Chinese software subsidiary Chinasoft Systems, China Electronics, and digital technology jointly invested in the establishment of the Hainan Joint Innovation Research Institute, mainly to focus on tackling key problems and promote the innovative development of the “Fei Teng + Kirin” (PK) system, thereby accelerating the maturity and development of PK system products.Improve the ecology, realize transformation and upgrade, comprehensively support the large-scale development of independent innovation projects, better serve the transformation and upgrade of traditional information systems in the core areas of the country and key industries of the national economy, expand the 佛山桑拿网 business scale slenderly, enhance comprehensive strength, and enhance corporate competitionLili.

CEC has increased its localization and established an independent technology industry ecosystem of “Feiteng CPU + Kirin OS”.

China Electronics has released the “Three-Year Action Plan for China’s Electronic Science and Technology Innovation.” In the next three years, in response to major scientific and technological issues in the development of the national internet information industry, it will achieve major breakthroughs in scientific and technological achievements and significantly increase the industry’s contribution.

Based on the independent technology industry ecosystem of the ARM architecture “Feiteng CPU + Kirin OS”, China Electronics has established an independent controllable software and hardware joint research base, organized more than 140 manufacturers to jointly innovate, and developed the world’s highest performance ARMV8 architecture general-purpose chipCreate domestic independent controllable software and hardware systems.

Encore’s industrialization landed and ecology became the core competitiveness.

From an industrial point of view, PC terminals installed with domestic operating systems have met office application requirements. Alibaba Cloud, Tencent Cloud, and Huawei Cloud platforms can run smoothly on domestic operating systems, and domestic operating systems and terminals have integrated a wide range of application foundation.

With the advancement of the localization replacement process, national production terminals and servers will enter a large accumulation period of users, and the needs of users will be transformed into basic offices. Whether the ecology can meet the needs of users has become the core competitiveness of the industry.

Maintain “Buy” rating.

According to the company’s annual report disclosure business plan, we expect the company’s revenue for 2019-2021 to be 60.

81/75.

76/93.

8.4 billion, net profit attributable to mothers was 2.

76/5.

68/9.

56 billion, EBITDA is 4 respectively.

67/8.

89/14.

15 billion.

We use the EV / (ebitda + R & D expense) assessment method. Considering the large number of R & D needs for operating system adjustment and ecology, it is assumed that the company’s R & D investment compound growth will be 21% in 2018-2020, and R & D expenses will reach 14.
.

72 billion, maintain “Buy” rating.

Risk warning: domestic technology has gradually evolved to expectations; government investment in autonomous and controllable products has fallen short of expectations; key assumptions may have a risk of error.