Intelligent transportation leads the enterprise, from ETC to V2X. Founded in 2004, the company is a national high-tech enterprise, China's leading intelligent transportation and Internet of things core equipment and solution provider. Since its inception, the company has been deeply ploughing the ETC business market. With the development of Internet of things technology and new infrastructure of intelligent transportation, the company has actively expanded new business areas and formed a wide range of products. The company has a comprehensive layout of ETC-X and ETC+. ETC-X focuses on the technological integration of car-end and road-end to create smart cars and smart roads to achieve "smarter traffic"; ETC+ focuses on the landing of road, vehicle, metropolitan and field scenes to "make life easier". From the two dimensions of capacity line and scene line, carry out continuous ploughing and enhancement to help the ecological construction of intelligent network connection infrastructure, intelligent network connection automobile, intelligent network connection transportation system and MaaS platform services, and finally form the business system of V2X.
With the rapid development of V2X industry, the company has taken the lead. In recent years, various government departments have issued a large number of favorable policies for V2X. The 14th five-year Plan for the Development of the Information and Communication Industry points out that it is necessary to promote the overall construction of C-V2X and 5G network, intelligent transportation, smart city and so on. In addition, a standard system covering all levels and levels of the C-V2X standard stack has been initially formed in China. According to the White Paper on the path and schedule of C-V2X industrialization, the C-V2X industry will enter a period of rapid development after 2025.
The company is actively engaged in the layout of V2X, and is currently a member of the "Intelligent vehicle-Road Cooperation key Technology and equipment Industry Research and Development Center of the Ministry of Transport". It already has on-board V2X communication terminal, roadside V2X communication module, vehicle-road collaborative application system and other software and hardware products. In addition, the company's leading position in the field of ETC can also provide positive help for the company's future V2X business expansion. We believe that the company already has a large first-mover advantage in the V2X field and is expected to grow with the industry.
ETC may usher in a comprehensive update in 26 years, and the demand of the industry may be high again. Most of the current ETC equipment is installed in 2019, while the design life of OBU is about 5-8 years, and the replacement time is relatively short, assuming that a complete upgrade is completed every 7 years, in this context, the large-scale installation of OBU in 2019 will usher in the update period in 2026, thus driving another substantial increase in market demand. As a high-quality enterprise with early layout of ETC business in China, the company is in a leading position in terms of technical strength, channel capacity and industry status. At the same time, the company is also actively promoting the development of ETC+, has formed a unique new ecosystem of ETC+. We believe that in the past years of development, the company has grown into a leader in China's ETC industry, in the future ETC industry will come in a large-scale renewal period, the company is expected to get a larger market dividend.
Profit forecast and investment advice. We estimate that the revenue growth of the company's ETC and related business and RFID business in 2022 will be 50% and 10% respectively, and the gross profit of the main ETC and related business will be relatively stable. The net profit of 2022, 2023, 2024, and 2024 will be 0.12, 0.80, 250 million and 1.39 million, respectively, and the EPS will be 0.06, 1.00, 1.39, respectively. The reasonable value range for 6 months is 24.74-29.69 yuan. For the first time, the coverage gives it a rating of "better than the market".
Risk hint. The switching of the core driving point of the company's business is not successful, the demand and promotion of the industry is not as expected, and the epidemic affects the implementation and confirmation of the business.
