China Software (600536): Consolidation of operating system subsidiaries, consolidation of operating system industry continues to heat up
Event: China Software and Winning Bid Software, the original shareholders of Tianjin Kirin two subsidiaries invested to establish a new company.
The key points of the investment are the evaluation of net assets, winning the bidding software, and Tianjin Kylin becomes a wholly-owned subsidiary of the new company: China Software and its subsidiary won the tender, Tianjin Kylin and the other shareholders of the two companies signed an investment intent agreement.The investment with Tianjin Kirin will be based on the value of the corresponding net asset value, and a new company will be established. The original shareholders will become shareholders of the new company, and the winning software and Tianjin Kirin will become wholly-owned subsidiaries of the new company.
China Software will hold the new company46.
23% equity has become the largest shareholder, which is conducive to overall management: As of September 30, 2019, the net assets of the successful bid software (50% owned by China Software) was 22,327.
At RMB 790,000, Tianjin Kirin (36% owned by China Software) has a net asset of 8222.
China Software is expected to hold the new company46 based on the value of the assessed value of the net assets.
The 23% equity has become the absolute largest shareholder of the joint venture company, and the equity of other shareholders has been relatively replaced, especially the winning bid of Tier One Software and Lanfeng, a related party, holding 50% of the shares.Tianjin Kirin’s right to speak will be improved.
After the establishment of the new company, a unified brand is expected to implement a more unified strategy for the operating system within the group. At the same time, the interests of the two teams winning the bidding software and Tianjin Kirin are expected to reach agreement on the size of the joint venture.
The integration of the operating system industry continues, and the structure remains to be clear: from the integration of Wuhan Deepin and Chengmai Technology to the merger with Tianjin Kirin, the integration of the operating system industry continues to heat up.
In addition to the cec system and depth of the industry, Chua’s Puhua, Chinese Academy of Sciences (Red Flag, Miles Red, Zhongke Fangde), Huawei Euler, ZTE’s new fulcrum, etc., will not be ruled out in the future.Possible.
The competitive landscape of operating systems is almost affected by the performance and market capabilities of operating system manufacturers, as well as by the chip and ecological competition landscape. The operating system industry’s competitive landscape remains to be determined.
High net interest rate and high market share, the pessimistic situation is still performing: as of September 30, 2019, winning the bid of software, Tianjin Kirin achieved revenue of 10955.
10,000 yuan, 5177.
640,000 yuan, achieving a net profit of 4398.
980,000 yuan, 1917.
20,000 yuan, the corresponding net interest rate is 40.
At present, the desktop side has won the bid for Kirin system and Loongson (expected to account for 50% of the proportion), Huawei Kunpeng, etc., Tianjin Kirin system is adapted to Feiteng (expected to account for 30%). Under pessimistic conditions, next year, next year, next year, there is still a share of 50%%, Elasticity is still full.
Earnings forecast and investment grade: EPS is expected to be 0 in 2019-2021.
43 yuan, the current price corresponds to 175/42/28 times PE.
China Software has won two bids for Kirin and Galaxy Kirin operating systems. The former is separate from Loongson and Hisilicon. The two are compatible with Feiteng. The domestic operating system market share in 杭州夜网论坛 the second phase of the pilot is about 80%.
The company’s performance will start to increase after the independent software and hardware business of the party and government system is launched next year, maintaining a “buy” rating.
Risk warning: The government cloud market is progressing more than expected; the autonomous controllable market is lower than expected.