研究报告全文：MN12Jan2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateChinasoft354HKBenefitingfromlocalizationtrendwithKaihongOSTargetPriceHK914Chinasofthostedaninvestorcallon11JantodiscussthelatestupdatesPreviousTPHK779regardingKaihongOSdevelopmentWebelievethekeytakeawaysisthatUpDownside283ChinasoftisbenefitingfromthelocalizationtrendinabroadersensefromCurrentPriceHK712KaihongOSKunpengARMcloudmigrationERPapplicationsoftwareandIoTproductsAfterayearofworkforcerestructuringweexpectChinasoftrevenueChinaSoftwareITServicesgrowthtoaccelerateinFY23EasenterprisedigitalizationandITspendingwillMarleyNGANpickupwithloosenedCOVIDrestrictionsinChinaMaintainBUYwithnewtarget85239163719priceofHK914marleyngancmbicomhkKaihongOSforIoTbasedonOpenHarmonyChinasoftcooperatedwithBowenLIShenzhenKaiHongDigitalIndustryDevelopmentSZKaiHongtodevelop85237618957KaihongOSRDonmiddlewarekitsdomesticchipcompatibilityetclibowencmbicomhkbasedonOpenHarmonyandIoTdevicesmanagementplatformSZKaiHongisaJVsetupbyBJChinasoftandShenzhenCapitalandthatHuaweiStockDataindirectlyowns20stakeSZKaiHongstrategicallyfocusesonMktCapHKmn215523Avg3mthstoHKmn63manufacturingtransportationinfrastructurehealthcarefinanceand52wHighLowHK890483educationindustrieswhichhavestrongdemandindigitalizationChinasoftsTotalIssuedSharesmn30270revenuerelatedtoKaihongOSincludesIoTproductssalesandITSourceFactSetoutsourcingservicesWeexpectsuchrevenuetobeRMB25bninFY22EShareholdingStructureaccountingfor12ofrevenueChenYuhong-Chairman108NewBusinessesbenefitingfromlocalizationdemandinabroaderUBSGroupAG100SourceHKExsenseInsteadofinvolvinginWindowsPCsystemreplacementChinasoftNewBusinessessegmentgrowthisdrivenbylocalizationtrendinabroaderSharePerformancesenseincluding1KaihongOSRD2HuaweiCloudmigrationbasedonAbsoluteRelativeKunpengARMchipsets3applicationsoftwaresuchasHuaweiERP1-mth30-433-mth441132projectand4IoTdevicesRDbasedonKaihongOSWeexpectChinasoft6-mth-68-82NewBusinessesrevenuetogrow3425YoYinFY22-23ESourceFactSetTraditionalITOutsourcingsteadygrowthWeexpectChinasoftto12-mthPricePerformancemaintainasteadygrowthintraditionalIToutsourcingbusinesswith513YoYinFY22-23ETheslowdowninFY22wasduetotheCOVIDresurgencein2H22andthattelecomandinternetcustomersscaledbackinITspendingWeexpectdemandtopickupgraduallyinFY23EasmacroenvironmentimprovesMaintainBUYWeloweredFY22netprofitby6butraisedFY23-netprofitby3asweexpectenterprisedigitalizationandhenceITspendingtoSourceFactSetreacceleratewithChinaCOVIDpolicychangeMaintainBUYwithnewtargetpriceofHK914priorHK779aswerollforwardto15xfullydilutedRelatedReportsFY24EPEin-linewith3-yearmean1Chinasoft354HKFY1H22beatEarningsSummaryworkforcerestructuringinprogress30Aug2022linkYE31DecFY20AFY21AFY22EFY23EFY24E2Chinasoft354HKShenzhentoRevenueRMBmn1410118398208652443627773providesubsidiesinbuildingYoYgrowth171305134171137HarmonyEulerecosystem15JulyNetprofitRMBmn9549113691171514351167412022linkDilutedEPSRMB032036038046054YoYgrowth12612953225167ConsensusEPSRMB032036042050061DilutedPEx149261163133114EVSalesx1208060504Yield0503050607ROE12511297108114Netgearing228312436424444SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk12Jan2023FocusChartsFigure1RevenueandgrowthFigure2RevenuemixFY1H22Rmbmn20000451800040Cloud1600035smart1400030business1200032251000020800015TraditionalIT6000outsourcing400010682000500201120132015201720192021RevenueYoYSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesFigure3RevenuemixbycustomerFY1H22Figure4Margins3530Others302520Huawei1551Alibaba103PingAn530TencentHSBCHonor20112012201320142015201620172018201920202021472GPMOPMNPMSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMFigure5ForwardrevenueandemployeesgrowthFigure6ChinasoftemployeetrendEmployeesno70100000706090000605080000504070000403060000205000030104000020030000200820102012201420162018202010-1020000100000EmployeesYoY1-yearfwdrevenueYoY0-101H092H101H122H131H152H161H182H191H21SourceCompanydataCMBIGMSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE212Jan2023IoTusecasesbasedonKaihongOSFigure7ApplicationsinsmartinfrastructureSourceKaihongCMBIGMFigure8IoTdevicesmanagementplatformSourceKaihongCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE312Jan2023Figure9ShareholdingstructureofSZKaiHongSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE412Jan2023EarningsrevisionFigure10Earningsrevision2022E2023E2024ERMBmnNewOldDiffNewOldDiffNewOldDiffSales2086522105-62443625576-42777330145-8Grossprofit50625357-657605916-366886990-4OPProfit897944-5117511175137213333PBT12481323-6155715103181218060Netprofit11711243-6143513923167416680EPSRMB038040-404604450540532MarginsGM2432423bps23623144bps24123289bpsOPM43433bps484444bps494452bpsPBTmargin6060-1bps645947bps656054bpsNetmargin5656-1bps595443bps605549bpsSourceCompanydataCMBIGMestimatesFigure11CMBIestimatesvsconsensus2022E2023E2024ERMBmnCMBIStreetDiffCMBIStreetDiffCMBIStreetDiffSales2086522535-72443627317-112777332387-14Grossprofit50625683-1157606945-1766888328-20OPProfit8971206-2611751538-2413721917-28PBT12481378-915571704-918122084-13Netprofit11711290-914351566-816741865-10EPSRMB038041-8046051-9054061-11MarginsGM243252-96bps236254-185bps241257-163bpsOPM4354-106bps4856-82bps4959-98bpsPBTmargin6061-13bps646213bps65649bpsNetmargin5657-11bps595714bps605827bpsSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE512Jan2023OperatingmodelFigure12OperatingmodelRMBmn202020212022E2023E2024ERevenues1410118398208652443627773Costofsales998313494158041867521085GrossProfit41184904506257606688Grossmargin292267243236241RD9301249134716591855SGA20312699288933113791OperatingIncome95279689711751372Operatingmargin6743434849Non-OperatingIncome83456351382440ProfitBeforeTax10351252124815571812Incometaxexpensegain8711578123140Minorities70212NetIncometoShareholders9551137117114351674Netmargin6862565960EPSRMB033037038046054FullydilutedEPSRMB032036038046054RevenuebreakdownIToutsourcing1083013063137161549917049Emergingcloudbusiness327153357149893710724Huawei8030988099791097712404HSBC8301180135714931642Tencent500706720792951Alibaba400590602662861PingAn450550605666732Others389154927603984711184GrowthYoYRevenues1730131714Grossprofit151931416OperatingIncome15-16133117EPS71322317SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE612Jan2023Figure13Semi-annualoperatingmodelRMBmn1H202H201H212H211H222H22E1H23E2H23ERevenues6059804283411005710025108401107813358GrossProfit16492469229426102482258026413119Operatingprofit421531423374485412567608Netprofitloss401554518619572600590846EPSRMB016019019020020019019027MarginsGrossmargin272307275260248238238234Operatingmargin6966513748385146Netmargin6669626257555363GrowthHoHRevenues-73342108221GrossProfit-1850-714-54218Operatingprofit526-20-1230-15387Netprofitloss238-620-85-243GrowthYoYRevenues92438252081123GrossProfit5223968-1621Operatingprofit-1320-3015101748Netprofitloss1141291210-3341SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE712Jan2023ValuationChinasoft354HKBUYTPHK914WeloweredFY22netprofitby6butraisedFY23-netprofitby3asweexpectenterprisedigitalizationandhenceITspendingtoreacceleratewithChinaCOVIDpolicychangeMaintainBUYwithnewtargetpriceofHK914priorHK779aswerollforwardto15xfullydilutedFY24EPEin-linewith3-yearmeanFigure14PeersvaluationSalesEPSMkCapPriceTPPEROECAGRCAGRCompanyTickerRatingUSmnLCLCFY23EFY24EFY23EFY24EFY21-24FY21-24Chinasoft354HKBUY27587129141331141081142013iSoftStone301236CHNR36453885NA1381031611742229DigitalChina000034CHNR22292274NA11798161164984InfosysINFOINNR76007148070NA2532183133321814TataConsultancyTCSINNR150111334490NA2892544494641515Mean1861572382501731Median1381141611741815SourceBloombergCMBIGMFigure1512MforwardPEbandFigure1612MforwardPBbandxHK3525302025152015101055--Jul-20Jul-21Jul-22Jan-20Jan-21Jan-22Mar-20Mar-21Mar-22Sep-20Nov-21Nov-20Sep-21Sep-22Nov-22May-20May-21May-22Jul-20Jul-21Jul-22Jan-20Jan-21Jan-22Mar-21Mar-20Mar-22Sep-22Sep-20Nov-20Sep-21Nov-21Nov-22May-21May-22May-20ClosingPx64x125x1-yrfwdPEMeanMean1SDMean-1SD186x247x309xSourceCompanydataCMBIGMSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE812Jan2023FinancialSummaryINCOMESTATEMENT2019A2020A2021A2022E2023E2024EYE31DecRMBmnRevenue120421410118398208652443627773Costofgoodssold8459998313494158041867521085Grossprofit358341184904506257606688Operatingexpenses275631674108416545865316Sellingexpense618729943106412461416Adminexpense119613021756182520652374RDexpense8099301249134716591855Others13420515970385329Operatingprofit82795279689711751372Interestexpense1661511001108595Others138235555461467535Pre-taxprofit79910351252124815571812Incometax428711578123140Minorityinterest270212Netprofit7559551137117114351674BALANCESHEET2019A2020A2021A2022E2023E2024EYE31DecRMBmnCurrentassets81981039413520140791629818362Cashequivalents252637875556751082019342Restrictedcash329745805894484359906700Othercurrentassets237520272069172721082320Non-currentassets254726933383347635033527PPE8028581220101410941169Intangibles1101108610371021968917Othernon-currentassets6437491126144014401440Totalassets107451308716902175551980121889Currentliabilities315027183986473256516189Short-termborrowings1523368917202722992474Accountpayables122917532252246330533382Othercurrentliabilities397597817242298333Non-currentliabilities106215921290215215215Long-termborrowings92814211021000Othernon-currentliabilities134171269215215215Totalliabilities421143115276494758666404Sharecapital116132139139139139Capitalsurplus314547356294622362236223Retainedearnings367744925760677881059655Otherreserves471605589554554554Totalshareholdersequity6468875311604125861391315463Minorityinterest662323222222Totalequityandliabilities107451308716902175551980121889PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE912Jan2023CASHFLOW2019A2020A2021A2022E2023E2024EYE31DecRMBmnOperatingProfitbeforetaxation79910351252124815571812Depreciationamortization197170221140123126Taxpaid84832078123140Changeinworkingcapital5165338871043882559Others35856439636700Netcashfromoperations754115396227206751239InvestingCapitalexpenditure105159287150150150Others120322426015351Netcashfrominvesting224192530751203201FinancingDividendpaid48527088108125Netborrowings5221717388273175Others653196127437012Netcashfromfinancing650362137736916652NetchangeincashCashatthebeginningoftheyear264625263787555675108201Exchangedifference162403545351Cashattheendoftheyear252637875556751082019342GROWTH2019A2020A2021A2022E2023E2024EYE31DecRevenue138171305134171137Grossprofit10414919132138161Operatingprofit15151163126310168Netprofit5526519130225167PROFITABILITY2019A2020A2021A2022E2023E2024EYE31DecGrossprofitmargin298292267243236241Operatingmargin696743434849ReturnonequityROE12112511297108114GEARINGLIQUIDITYACTIVITIES2019A2020A2021A2022E2023E2024EYE31DecNetdebttoequityx000203040404Currentratiox263834302930Receivableturnoverdays98611691153836882868Inventoryturnoverdays231944424443Payableturnoverdays878734523632601561VALUATION2019A2020A2021A2022E2023E2024EYE31DecPE114125230160130112PEdiluted123149261163133114PB141625151412Divyield060503050607EV188351169128152919134270130085120418EVSales161208060504SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1012Jan2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE11