In-depth Report (600588) 44.30 55 12 ( ) 224.64 ( ) 136.19 ( ) 9951.55 ( ) 6033.13 12 / 19.20 50.60 (12 ) 230% 2007 06 14 170% 110% 50% -10% 03-06 06-06 09-06 12-06 3G NTT 55 07 09 0.89 1.16 1.52 55 % 5.15 (29.71) (34.16) 6.85 11.88 134.57 021-50818887-223 yinming@ebscn.com (8621)50818887-275 chenyang@ebscn.com ( ) 2005 2006 2007F 2008F 2009F 1000.76 1113.26 1396.59 1847.13 2392.21 98.84 173.39 200.58 261.18 341.34 ( ) 0.44 0.77 0.89 1.16 1.52 (X) 90.76 51.73 44.72 34.34 26.28 ( ) 5.37 5.74 6.19 6.77 7.53 (X) 7.43 6.95 6.45 5.90 5.30 EV/EBITDA(X) 91.72 70.19 64.23 48.82 28.72 ROIC(%) 14.39% 54.48% 69.63% 69.56% 78.00% ROE(%) 2.7% 6.6% 6.6% 7.9% 10.6% (%) 0.51% 1.27% 1.12% 1.46% 1.90% : Wind
ERP ERP ERP SAP ERP ERP ERP CCID 2006 2010 19.9% ERP 45% 2
160 140 120 100 80 60 40 20 0 2002 2003 2004 2005 2006E 2007E 2008E 2009E 2010E ( ) 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% CCID 2004 (2004 2006 ) ERP 05 06 05 3
2 ORACLE SAP 2 2005 66.7% MICROSOFT 8.9% IBM 8.6% ORACLE 4.6% BEA 2.7% 2.4% SAP 2.0% 1.6% SUN 0.9% Sybase BMC 0.8% 0.7% IBM IT Oracle: BEA ERP SAP ERP 4
NC U8/U9 NC ERP ERP U8 ERP U9 3 5
6 2006 ERP 1 NC5X NC6X U8 87X U9 852 U8X 2007/2008 2009
ERP CCID 2005 ERP 04 18.4% 20.4%. 2 2004 2005 8.9 18.40% 12.2 20.40% 5.9 12.10% 7.0 11.70% SAP 4.0 8.30% 5.0 8.40% 2.9 6.00% 3.9 6.50% 2.9 5.90% 3.8 6.40% 23.9 49.40% 27.8 46.60% 48.5 100% 59.7 100% CCID U870 U9 ERP 7
U9 ERP 300 3 2006 U9 ERP 100 SOA U8 U9 C/S / B/S / C/S B/S B/S HTTP.net U9 SOA SOA IT IBM SOA 3 U8 U U8 U9 U8 U8 C/S / B/S / SOA 5 50 10 150 U8 U870 8
U8 05 50% U8 ERP U8 U870 U861 U8 U8 2 1400 3% 15% 4 ORACLE INFOR SAP 13% 16% 13% 15% 10% Bloomberg ERP 9
5 1988 1993 1996 1998 1999 2000 NC U8 2004 11 ERP-U8 U860 2006 12 ERP-U8 U870 2007 9 U9 40 2500 60 1800 SAAS 2000 U8 NC 01 02 04 U860 05 U870 U9 10
4 60.00% U8 NC U860 U870 U9 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2000 2001 2002 2003 2004 2005 2006 2007E 2008E 2009E 5 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2001 2002 2003 2004 2005 11
oracle SAP 6 business objects oracle 80% 80% 70% 70% 60% 60% 50% 40% 30% 20% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 50% 40% 30% 20% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Business Objects BI ORACLE 12
2004 ERP M-Business 2006 7 M-Business 4 PC 2004 78.2 2009 300.5 30.9% 7 13
700 600 500 400 300 200 100 0 2006 2007E 2008E 2009E 2010E ( 3G 350 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 ( ) CCID CCW, (GSM) 9.6KBT GPRS 112KB PC 2 2Mb 3G 08 3G 8 (GSM) (GPRS) (3G) 2MB 112KB 9.6KB 14
(M-Business) 9 50 4 200 NTT NTT DoCoMo Fidatone 15
CRM WAP 2005 7500 NTT DoCoMo 64%. NTT (M-Business) M-COMMERCE 10 ERP 2005 UFmobile (M-Business) ERP ERP ERP ERP SP 3G 16
NTT 09 06 1000 07 07 09 3000 5000 08 09 20% U9 U8 30% U8 07 08 U8 U8 07 10% U9 U8 U8/U9 U9 07 U9 09 U8 U9 U8, U9 U8/U9 08 09 30% NC 25% NC NC 06 NC NC 17
17.8% NC NC NC NC NC 25% 30% 07 2000 3000 08 10 100% 07 08 18
07 07 6 2004 2005 2006 2007E 2008E 2009E 524 667 751 896 1159 1473 3.25% 2.99% 1.86% 1.90% 2.00% 2.00% 160 269 285 404 566 764 16.79% 15.99% 18.85% 19.00% 19.20% 19.50% 25 41 51 63 79 99 72.87% 95.40% 85% 86% 87% 88% 725.9 1000.8 1113.3 1396.6 1847.1 2392.2 62.2 101.8 110.7 148.3 200.8 263.6 16.9 23.6 26.9 33.5 44.3 57.4 646.8 875.4 975.6 1,214.8 1,602.0 2,071.2 36 42 31 50 50 50 309.13 427.17 530.80 641.03 840.44 1076.50 314.87 407.97 385.35 505.56 640.95 808.57 (11.01) (6.41) (6.15) (14.77) (16.63) (18.21) 34.15 47.07 65.93 83.42 137.75 204.83 :(11.58) (0.47) 35.44 35.00 15.00 15.00 56.27 71.79 88.19 105.00 138.00 160.00 78.84 118.38 189.56 223.42 290.75 379.83 : 14.69 19.08 17.45 22.34 29.08 37.98 (5.29) 0.47 (1.27) 0.50 0.50 0.50 69.44 98.84 173.39 200.58 261.18 341.34 19
55 07 09 0.89 1.16 1.52 44 34 26 40 50 08 45 PE 52 5512.5 1.7 / 3 / 55 PE Infosys PE 38 48 TATA PE 25 0 PE PE 1.5 2.5 A 30 45-50 PE 11 20
50 45 40 35 30 25 20 15 10 5 0 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 30 PE infosys(pe) tata(pe) bloomberg 08 21
( ) 2005 2006 2007F 2008F 2009F 1000.76 1113.26 1396.59 1847.13 2392.21 101.8 110.7 148.3 200.8 263.6 875.4 975.6 1,214.8 1,602.0 2,071.2 (%) 87.5% 87.6% 87.0% 86.7% 86.6% 0.42 0.31 0.50 0.50 0.50 427.17 530.80 641.03 840.44 1076.50 407.97 385.35 505.56 640.95 808.57 EBIT 40.2 95.2 103.7 136.1 201.6 (6.41) (6.15) (14.77) (16.63) (18.21) 47.07 65.93 83.42 137.75 204.83 (0.47) 35.44 35.00 15.00 15.00 118.38 189.56 223.42 290.75 379.83 98.84 173.39 200.58 261.18 341.34 ( ) 2005 2006 2007F 2008F 2009F 980.0 884.5 1,251.9 1,430.6 1,601.1 666.3 713.2 1,026.2 1,164.3 1,285.8 79.4 70.6 83.8 110.8 143.5 2.8 3.4 4.2 5.5 7.2 328.0 521.6 261.7 247.8 291.4 114.4 135.1 171.4 219.4 281.6 102.1 89.0 111.7 147.8 191.4 1,492.5 1,606.3 1,758.1 2,001.6 2,311.1 244.2 281.7 330.9 437.9 567.3 - - - - - 6.4 8.2 9.6 13.1 17.1 237.8 273.6 321.2 424.8 550.2 16.4 14.9 16.8 22.2 31.1 - - - - - - - 16.4 14.9 16.8 22.2 31.1 260.6 296.7 347.6 460.1 598.4 1,206.8 1,290.1 1,390.4 1,520.9 1,691.6 172.8 224.6 224.6 224.6 224.6 1,492.5 1,606.3 1,758.1 2,001.6 2,311.1 ( ) 2005 2006 2007F 2008F 2009F 40.2 95.2 103.7 136.1 201.6 6.5 8.8 10.4 13.6 20.2 35.3 32.9 36.3 48.0 62.2 131.1 148.2 152.6 223.5 307.7 (39.0) (19.8) (59.1) (84.1) (105.8) - 17.1 (17.2) (42.3) (73.4) (86.5) (21.9) (37.0) (101.4) (157.5) (192.3) / 59.7 83.2 100.3 130.6 170.7 (46.1) (114.0) (100.3) (130.6) (170.7) - - - - - 44.5 (130.7) 355.1 140.0 122.0 : Wind
2005 2006 2007F 2008F 2009F 87.5% 87.6% 87.0% 86.7% 86.6% EBITDA/ 7.5% 11.5% 10.0% 10.0% 11.0% EBIT/ 4.0% 8.6% 7.4% 7.4% 8.4% / 9.9% 15.6% 14.4% 14.1% 14.3% 9.98 11.65 13.92 14.24 14.11 1.04 1.19 1.31 1.38 1.58 0.71 0.72 0.83 0.98 1.11 17.5% 18.5% 19.8% 23.0% 25.9% 21.6% 23.0% 25.0% 30.2% 35.4% 4.01 3.14 3.78 3.27 2.82 4.00 3.13 3.77 3.25 2.81 37.9% 11.2% 25.5% 32.3% 29.5% 35.3% 11.5% 25.5% 31.9% 29.3% EBIT 247.5% 136.9% 8.9% 31.3% 48.1% 42.3% 75.4% 15.7% 30.2% 30.7% ( ) 0.44 0.77 0.89 1.16 1.52 ( ) 5.37 5.74 6.19 6.77 7.53 ( ) 0.49 0.49 0.23 0.29 0.51 (X) 90.76 51.73 44.72 34.34 26.28 (X) 7.43 6.95 6.45 5.90 5.30 EV/EBITDA(X) 91.72 70.19 64.23 48.82 28.72 0.51% 1.27% 1.12% 1.46% 1.90% : Wind 6 15% 6 5% 15% 6-5% 5% 6 5% 15% 6 15% 23