introduction to this report:

haochen software (688657.SH) is the leading CAD software provider in China. its 2020 market share in China's 2D CAD field ranks among the top three, second only to Autodesk and zhongwang software. At the same time, the company joined hands with industry giants to launch 3DCAD series products to promote the process of domestic substitution, to create a CAD software cloud ecosystem, leading the market position.

2022 The company achieved revenue/home-to-home net profit of $2.41/0.062 billion, respectively. As of September 14, comparable companies had an average PE of 80.93 (excluding negative and extreme values)/79.30/52.04 times for 22/23/24, respectively.

abstract:

core highlights of the company and IPO offering:(1) the company is a leading provider of CAD software in China, and many 2D CAD technologies have reached the international leading level. it has joined hands with industry giants to launch 3DCAD series products to promote the process of localization substitution, build a cloud ecological service system of CAD software, and take the lead in the market. (2) The number of shares issued by the company in this public offering is 11.2182 million shares, and the total share capital after the issuance is 44.8728 million shares. The number of shares issued in the public offering accounts for 25% of the total share capital of the company after the public offering. The company plans to invest a total of 0.747 billion yuan in the fund-raising project. On the basis of consolidating the advantages of the existing Haochen CAD software technology, this fund-raising project uses cloud data and related technologies to build a cloud application and service ecosystem in the industry, helping the company to maintain the leading position of domestic CAD cloud.

main business analysis: the company deep research and development design industrial software field, mainly engaged in CAD-related software research and development and promotion of sales business. The company's 2D CAD product system is mature and adopts the "authorization + subscription" sales model, contributing about 90% of the company's revenue. From 2020 to 2022, the company's revenue and net profit attributable to its parent will grow at an average annual compound growth rate of 13.80 and 13.76 respectively, showing a steady growth trend. In 2022, the company's revenue growth rate will slow down due to factors such as weak market demand in the advertising industry. Due to the relatively low cost elasticity of software and Internet advertising promotion related business, the company's gross margin as a whole remained high.

industry development and competition pattern: China's status as a major industrial country has laid a huge downstream stock space for CAD, and the intelligent upgrading of industrial manufacturing has led to an increase in the penetration rate of CAD applications. According to iResearch, driven by the acceleration of industrial digitalization, the size of China's CAD market is expected to reach 6.7 billion billion yuan in 2023. At present, foreign enterprises have a significant market position in the field of high-end industrial software, and technological innovation and industry cooperation help domestic enterprises overtake.

comparable company valuation: the company's industry "I65 software and information technology services" in the past month (as of September 14, 2023) static price-earnings ratio of 65.04 times. According to the prospectus disclosure, Zhongwang Software (688083.SH), Jinshan Office (688111.SH), Yingjianke (300935.SZ), Guanglianda (002410.SZ), Zhiyuan Internet (688369.SH) as comparable companies. As of September 14, 2023, comparable companies have an average PE(LYR) of 80.93 times for 2022 (excluding negative PCG and extreme value Zhongwang Software), and a consistent forecast average PE of 79.30 times and 52.04 times for 2023 and 2024, respectively.

risk tips: 1) the risk of a single product; 2) the risk of a smaller overall size of the 2D CAD market.