Key points of investment

Next Wednesday (September 21), a company listed on the Science and Technology Innovation Board, “Harbin Railway Technology” will ask for a quote.

Harbin Railway Technology (688459): The company is one of the enterprises with the most complete product system in the domestic rail transit safety monitoring, inspection and intelligent operation and maintenance industry. The main products include rail transit safety monitoring and testing products, railway professional information technology products, and intelligent equipment products. The company achieved operating income of 689 million yuan/801 million yuan/872 million yuan respectively in 2019-2021, YOY was -12.69%/16.26%/8.77% in that order, and the three-year compound annual revenue growth rate was 3.36%; achieved net profit of 109 million yuan/108 million yuan/108 million yuan, YOY in that order of 49.87%/-0.35%/-0.78% of Guimo's net profit was 14.01%. In the latest reporting period, 2022H1 achieved operating income of 185 million yuan, an increase of 7.92% over the previous year; it achieved net profit of -0.03 billion yuan, which was narrower than the same period last year. The company expects to achieve net profit attributable to parent company owners from January to September 2022 of about -40 million yuan to -15.5 million yuan, an increase of 22.56% to 69.99% over the same period last year.

Investment highlights: 1. As an actual control enterprise of China Railway Group, the company is one of the enterprises with the most complete product system in the rail transit safety monitoring, inspection and intelligent operation and maintenance industry. The market share of many products is the highest in China. Currently, China Railway Group holds a total of 84.56% of the company's shares through subsidiaries, which is the actual controller of the company. The company has 6 kinds of rail transit safety monitoring and testing products, 3 intelligent equipment products, and 2 railway professional informatization products. Currently, it is one of the enterprises with the most complete product system in the rail transit safety monitoring and intelligent operation and maintenance industry. Moreover, the company's market share of various products is the highest in China. As of the end of December 2021, the company's THDS market share was about 48%, TADS market share was about 90%, truck fault trackside image detection system (TFDS system) market share was about 33%, and automatic car number recognition system (AEI) market share was about 70%. The company may benefit from the continued increase in investment in China's railway and urban rail transit, driven by continuous demand for new rail transit testing, as well as demand for continuous product renewal and maintenance in the stock market. 2. The company is one of the earliest companies to develop and industrialize THDS products in China, pioneering the application of autonomous infrared shaft temperature detection equipment in China. Currently, THDS has become the product that has contributed the most to the company's revenue; based on this, the company plans to explore the autonomy and control of THDS core components to enhance the company's core competitiveness in the field of infrared detection equipment. The company's business originated from the Harbin Railway Research Institute. In 1988, it pioneered the installation and application of an automated vehicle axle temperature detection system on the Daqin Line, pioneering domestic autonomous infrared axle temperature detection equipment and laying the company's technical foundation and technical direction in the field of rail transit safety monitoring and testing.

Since then, the company has taken advantage of its first-mover advantage in the field of infrared detection to further develop THDS products and related businesses, all of which contributed the most to revenue during the reporting period. On this basis, the company plans to achieve independent production of THDS core components through fund-raising projects to enhance the company's core competitiveness in the field of infrared temperature measurement. In addition to rail transit inspection requirements, the company is expected to further extend the application of infrared detection equipment to other fields of railways. 3. The company plans to continue to enrich and improve its product structure, and is expected to further expand its business layout through the launch of new products. The company plans to use the funds raised to focus on developing 4 new rail transit safety monitoring and inspection products, such as EMU entry/exit inspection systems, intelligent control systems for high-speed rail safety gates, intelligent inspection robot systems for railway bridges, and intelligent inspection systems for vehicle axles (for) wheels. At the same time, based on technology accumulation in RFID, new product lines such as intelligent identification and monitoring terminals and portable 3D laser measuring instrument products will mainly serve the existing rail transit market, and can also be promoted and applied in other fields such as road traffic and high-end equipment manufacturing, which is expected to further expand the company's business layout.

Comparison of listed companies in the same industry: According to the type of business, Kangtuo Infrared, Shenzhou High Speed Rail, and Yuanwanggu were selected as comparable listed companies. According to the comparable companies mentioned above, the average revenue scale of the industry in 2021 was 1,332 billion yuan, the PS-TTM (arithmetic average) was 5.17X, and the gross sales margin was 31.21%. In comparison, the company's revenue scale was less than the average of the industry, but the gross margin was higher than that of comparable companies.

Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons. The company content is mainly based on the content of prospectuses and other public information, there is a risk that the selection of listed companies in the same industry is inaccurate, there may be interpretation biases in the content of the content data, and the risks of specific listed companies are displayed in the text.