Items:

The company released its semi-annual report for 2022: in the first half of the year, the company's operating income was 115 million yuan, an increase of 8% over the same period last year; its net profit was 19 million yuan, down 49% from the same period last year; and its non-net profit was 8 million yuan, down 76% from the same period last year. Q2 achieved a revenue of 67 million yuan in a single quarter, an increase of 8% over the same period last year, with a net profit of 10 million yuan, a decrease of 53% over the same period last year, and a deduction of 4 million yuan from non-net profit, down 81% from the same period last year.

Comments:

Overseas business is growing significantly. The income of intelligent voice products is 82 million yuan, computer vision is 21 million yuan, natural language is 10 million yuan, and application services related to data resources are 1 million yuan. Overseas business increased significantly in the first half of this year, with the share of revenue rising sharply to 57.14%, and the amount of orders signed in the overseas market increased by nearly 2.5 times compared with the same period last year, driving up the company's business income level as a whole. By the end of the reporting period, the number of enterprise service customers had reached 740 (45 new customers for H1 in 2022).

Continue to increase investment to increase the rate of expenses. In terms of gross profit margin, 22H1 was 66.38%, down 4.44pct from the same period last year; the rates of sales expenses, management expenses and R & D expenses were 7.22%, 19.80% and 37.18%, respectively, + 2.18pct, + 8.98pct and + 14.53pct, respectively. The increase in the company's expense rate is mainly due to the company's continued investment in the iteration of the R & D system, the upgrading of the management structure and incentive system, and the global construction of the marketing system. 22H1 has 272 employees, an increase of 47.83% over the same period last year, providing a strong internal driving force for the company's rapid expansion in the next 3-5 years. Among them, the number of R & D personnel increased by 16 over the beginning of the year, an increase of 72% over the same period last year.

Focus on the layout of intelligent driving business, the ability to become a platform is constantly enhanced. The company completed the construction of the intelligent driving team last year, and in the first half of this year, the company completed the third generation intelligent driving tagging platform online. The platform tool chain basically realizes the full coverage of the visual scene outside the intelligent cockpit (including more than 50 2D labeling and key 3D labeling functions). It is expected to launch the fourth generation intelligent driving tagging platform by the end of the year, which will further improve the 3D function. By the end of June 2022, the company has served more than 40 customers in the field of smart driving, covering traditional car companies, new power car companies, intelligent driving technology companies and so on. In addition, the company has obtained Class B surveying and mapping qualification through the administrative license of Beijing Municipal Planning and Natural Resources Commission during the reporting period, laying the foundation for the company's intelligent driving collection business development.

Investment suggestion: considering that the company's new business is still in the investment period, we estimate that the company's revenue in 2022-2024 will be 270 million yuan, 352 million yuan and 447 million yuan respectively, and the net profit forecast will be 34 million yuan, 50 million yuan and 68 million yuan respectively, corresponding to the current EPS of 0.80,1.17,1.59 yuan (22,23 years ago, 2.32,2.89 yuan). Reference comparable company gives 23 years 50 times PE, gives target price 58.5 yuan, covers for the first time, gives "recommended" rating.

Risk hint: the iterative speed of the core product is not as fast as expected, the progress of product research and development is not as expected, and the competition in the industry is intensified.