On September 23, Eastcom (600776.SH) rose to another daily limit, achieving 2 consecutive daily limits.

Due to its involvement in multiple concepts such as communication equipment, IT innovation, and reform of central enterprises, Eastcom's share price has performed strongly. Wealth Finance Network notes that Eastcom's performance grew steadily in the first half of this year, with a significant increase in the first quarter in particular. In the future, with the continuous acceleration of favorable policies in the IT innovation industry, the company is expected to be the first to enjoy the benefits of industry growth and achieve rapid growth.

Due to its involvement in multiple concepts, Eastcom has risen sharply in succession

Founded in 1958, Eastcom is a provider of integrated solutions that integrate hardware, software, and services. The company successfully restructured and went public in 1996, becoming a state-controlled listed company on the Shanghai Stock Exchange that issues both A and B shares.

According to the official website, Eastcom focuses on three main industries: "information and communication technology" based on private network communication, public network communication, and ICT services; "financial technology" based on financial electronics; and "smart manufacturing." During the 14th Five-Year Plan period, the company will continuously innovate and transform around its core responsibilities and businesses.

In terms of specific business, Eastcom mainly provides special network communication equipment and integrated solutions for emergency communication to government departments, enterprises, and institutions; one-stop solutions for network optimization, software development, and operation and maintenance services to telecom operators and ICT equipment suppliers; and financial information software and smart branch integrated solutions to banks and government agencies.

It is worth noting that the concept of IT innovation has continued to gain momentum recently. Institutions indicate that as the country continues to introduce favorable policies for the IT innovation industry and China's digital economy develops rapidly, various departments and industries are closely monitoring developments in IT innovation. The market demand for the IT innovation industry continues to increase, promising broader development prospects in the future. At the same time, reforms of central and state-owned enterprises have been active recently, and with the support of various policies, mergers and acquisitions in China's capital market are entering an "active period." Against this backdrop, the state-owned enterprise reform sector has also been active recently.

Due to its involvement in multiple concepts such as emergency communication, private network communication, IT innovation, and reform of central enterprises, and the authenticity of these concepts, Eastcom has received strong attention from market funds recently. It has achieved 2 consecutive daily limits and has risen by a cumulative 28.74% in the past three trading days, ranking among the top gainers in the Zhejiang sector.

By the close on September 23, Eastcom rose 10.01% to close at 10.66 yuan per share.

Revenue and net profit growth in the first half of the year

In terms of performance, Eastcom achieved growth in both revenue and net profit in the first half of 2024. According to the company's disclosure, Eastcom generated revenue of 1.306414 billion yuan in the first half of the year, up 3.55% year-on-year; net profit attributable to shareholders was 88.3314 million yuan, up 24.53% year-on-year. In particular, Eastcom achieved a net profit attributable to shareholders of 135.3797 million yuan in the first quarter, a significant year-on-year increase of 903.59%.

In its interim report, Eastcom stated that in the first half of 2024, the company adhered to the principle of seeking progress while ensuring stability, continued to expand, optimize, and strengthen its core responsibilities and businesses, and strived to create a new situation of coordinated development with information and communication technology, financial technology, and smart manufacturing as its core businesses. At the same time, the company further strengthened market development, R&D investment, and flat management of the supply chain, continuously expanding its market position and technological advantages in the industry.

Wealth Finance Network notes that Eastcom's profitability has been growing steadily over the past three years. From 2021 to 2023, the company's net profit attributable to shareholders was 116.1798 million yuan, 134.8868 million yuan, and 152.8060 million yuan, respectively.

With years of experience in the field of information and communication technology, Eastcom has mastered core technologies in private network communication, including TETRA, PDT, 5G converged core network, base stations, and terminals. It has an internationally advanced and domestically leading digital trunking communication system that can provide customers with applications such as converged communication, visual dispatch, network-wide recording, information publishing, and querying. In public networks, the company has mastered core technologies such as decoupling, core network, signaling, and 5G new calls, and has a complete product line for operator businesses. In terms of ICT, the company has received the title of Gold Service Provider from customers for several consecutive years. In the field of financial technology, the company continues to increase R&D investment in areas such as big data, artificial intelligence, and financial information software. In the field of smart manufacturing, the company continuously enhances the level of intelligence of manufacturing lines through intelligent transformation.

For a long time, Eastcom has focused on developing markets and serving customers in the fields of information and communication technology, financial technology, and smart manufacturing. At present, the company has formed numerous advantages in R&D, marketing, quality, branding, and talent, and has strong market competitiveness in the field of information and communication technology.

Focusing on the IT innovation field, expected to continue to benefit

In recent years, Eastcom has continued to focus on IT innovation products, actively promoting their commercialization. It has successfully bid for IT innovation projects from the Industrial and Commercial Bank of China, Zhongyuan Bank, and Bank of Hunan, and its key IT innovation business has continued to make breakthroughs.

Since the beginning of this year, the IT innovation industry has seen a dense policy acceleration. In March, the Central Government Procurement Network issued the "Notice on Updating the Central Government Agencies' Desktop and Laptop Batch Centralized Procurement Configuration Standards," which stated that relevant departments and units should include CPU and operating systems that meet safe and reliable evaluation requirements in their procurement requirements when purchasing desktop and laptop computers.

In August, the State-owned Assets Supervision and Administration Commission of the State Council and the National Development and Reform Commission jointly issued the "Guiding Opinions on Regulating the Procurement Management of Central Enterprises." It proposed efforts to create a supply chain that complies with laws and regulations, is open and transparent, and effectively enhances supply chain security levels. The document also aims to establish and improve a procurement management system for central enterprises and comprehensively promote the standardization, lean, collaborative, and intelligent development of procurement management in central enterprises.

With the continuous acceleration of favorable policies, the IT innovation industry is expected to become one of the most clearly defined development paths, as technological breakthroughs continue, technical standards become increasingly clear, and procurements by party and government agencies and industries gradually take shape. Eastcom, which has a certain market position in the industry and core competitiveness, is expected to be the first to enjoy the benefits of industry growth and achieve high-quality and sustainable corporate development.