In the battlefield of digital intelligence, Digiwin bets on "Athena"

Focusing on intelligent manufacturing solutions, Digiwin recently submitted a listing application to the Hong Kong Stock Exchange to raise funds to fully expand the "Athena Intelligent Platform". Key Points: The company's profits have steadily increased over the past three years, with a profit of 170 million yuan last year. The company's valuation is not cheap, with a price-to-earnings ratio exceeding 70 times in the A-share market. Liu Zhiheng For Digiwin Software Co., Ltd. (300378.SZ) founder Sun Aibin, the wisest decision of his life was to shift the company's development focus from Taiwan to the mainland market over twenty years ago, thus catching the explosive growth era of small and medium-sized enterprises in the mainland. In recent years, the company has also aimed to step onto the international capital stage by applying for a listing in Hong Kong. Born in 1948 in Taiwan, Sun Aibin once taught at Tamkang University and founded Digiwin in 1982, focusing on ERP (Enterprise Resource Planning) products in the 1990s. The business grew larger, and the company was listed in Taiwan. After 2000, the company began to develop the mainland market and even formed a joint venture with Digital China. Hitting the Mainland Market With keen market insight, Sun Aibin saw the rapid economic development in mainland China and the abundant business opportunities, thus concentrating on the mainland market. In 2008, he resolutely delisted the company from the Taiwan Stock Exchange and renamed it Digiwin. It has proven that Sun Aibin's decision was absolutely correct, as the continuous development of mainland enterprises has led to a significant increase in demand for ERP software, and Digiwin was listed on the Shenzhen Stock Exchange's Growth Enterprise Market by 2014. The company's main business is to provide key business process intelligent solutions for the manufacturing industry, assisting enterprises in digital transformation and improving operational efficiency. Its services include providing intelligent software products, integrated software and hardware solutions, and intelligent technology services. Taiwan's Hon Hai Group has long recognized Digiwin's development potential and, through its subsidiary Industrial Fulian (601138.SH), formed a concerted action group with Top Partner, Sun Aibin, and related parties, holding a 20.12% stake in Digiwin. After over 40 years of deep cultivation in the industrial manufacturing field, Digiwin has gradually developed into a leading software supplier in the industrial manufacturing sector. According to Frost & Sullivan, by 2025, based on revenue, the company will be the largest domestic provider in China's intelligent manufacturing solutions market and ranked fifth in the market with a market share of 1.4%. Revenue Growth Not Attractive Although the company has seen stable business development in recent years and ranks among the top in the intelligent manufacturing market, from an investment perspective, it remains to be seen whether it is worth betting on, as there is currently no explosive highlight. Over the past three years, Digiwin's performance has steadily risen, with revenues of 2.23 billion yuan, 2.33 billion yuan, and 2.43 billion yuan from 2023 to 2025, but you will notice that the annual growth is only a few percentage points. As for profits during this period, they are 155 million yuan, 158 million yuan, and 174 million yuan, with a year-on-year growth of less than 2% in 2024 and only a 10% year-on-year growth last year. In terms of revenue and profit, there is currently no ideal growth rate, which instead gives the market a sense of slowdown Accounts Receivable Continues to Rise The company's finances do not seem to be impressive; on the contrary, there are signs of weakening. Trade accounts receivable and notes receivable reached 909 million yuan at the end of last year, an increase of nearly 39% compared to 655 million yuan in 2023. The accounts receivable turnover days during the period increased from 57.4 days in 2023 to 95.3 days last year, an increase of nearly 38 days, with a growth rate of 66%. The inventory turnover days during the period also continued to rise, from 24.2 days to 36 days, an increase of nearly 50%. The increases in various items far exceed the revenue growth rate. What is the reason for this? Is it because the company has relaxed the payment terms and turnover days for customers to maintain sales volume? In addition, the company's financial asset impairment losses have continued to expand, with losses of 26.45 million yuan, 48.85 million yuan, and 57.79 million yuan over the past three years. The losses in this area mainly stem from the increase in expected credit loss provisions for trade accounts receivable, indicating a trend of increasing bad debts. Valuation Not Cheap Compared to industry peers, Kingdee International (0268.HK) and Yonyou Network (600588.SH) have higher recognition and customer usage in the ERP market than Digiwin. Last year, the revenues of the two companies were also 2 to 3 times higher than that of the latter, and in terms of market capitalization, they far surpassed Digiwin. In terms of valuation, Kingdee International has a price-to-earnings ratio of over 300 times, Yonyou Network is still in a loss position, while Digiwin's price-to-earnings ratio in the A-share market is only 72 times. Nevertheless, this price-to-earnings ratio is not cheap; unless the company's earnings can increase exponentially in the coming year, the attractiveness of the valuation at this level appears unappealing. For now, the company may need to look at its "Athena Smart Platform" in the future. This platform began full-scale establishment in 2022 and has gradually been integrated into smart manufacturing solutions. Digiwin emphasizes that the Athena Smart Platform is the core carrier of its AI strategy, and the company has high hopes that it can become the cornerstone for continuous product innovation and service optimization. The funds raised from the Hong Kong listing will also be primarily invested in this platform, and its success or failure will be a key factor for the company's future