Yesterday of Shangtang Zhijia business: a steady start to R & D Xu Li. Shangtang's auto business has a coveted start in the entire AI circle. In 2016, the global TOP5 OEM came to China to find a partner in the direction of intelligent driving, and finally chose Shangtang after many technical verification. In the same year, the company officially began to develop the Smart Auto self-driving platform and set a new world record in the field of pedestrian and vehicle identification in KITTI 2016. In 2017, the company signed a long-term cooperation agreement with Honda to jointly cultivate self-driving technology. 2018 released the first intelligent car product, SenseDrive DMS driver monitoring system, and established cooperative relations with several international top Tier 1; by 2020, the company has successfully developed DMS, OMS and ADAS solutions, and realized the L4 intelligent network connection minibus has landed in Jiangsu (Wuxi) vehicle networking pilot area.
Today: the shadow came out of nowhere, and the status of the industry was verified by pre-loading and mass production. In 2021, the company officially released SenseAuto Shadow, across the car end, road end, cloud end, all-round display of intelligent car Shantang program, in 2021 IPRDaily released the global intelligent driving patent list, Shangtang Technology and Toyota, IBM and other global automotive / technology giants into the top 10, leading Alphabet Inc-CL C, Microsoft Corp and other technology companies. At present, the scale of mass production and delivery of Shangtang's intelligent cabin products ranks first in the industry. Shangtang's intelligent cabin products can be seen in many production vehicles, including SAIC, Guangzhou Automobile, Dongfeng, BYD, NIO Inc., Chery, Great Wall, Gaohe and many other brands. Judging from the specific financial performance, in the first half of 2022, the company's smart car business achieved explosive growth, with revenue of 121 million yuan, an increase of 71% over the same period last year, and the number of customers served by the smart car sector was 20, up 54% over the same period last year. The income of a single customer increased by 11% and added more than 3 million mass production cars in the first half of 2022, making rapid progress.
Tomorrow: add V2X, the tree of vanishing shadow will eventually be Ye Mao. In 2022, Shangtang launched a new SenseAutoV2X vehicle-road collaboration platform. From the value creation of the car side to the intelligent perception on the side of the road, and then to the intelligent cognitive decision-making on the cloud, Shangtang completed the overall layout of the platform. 2022-2025 is the development period of C-V2X industrialization deployment, which is promoted and applied in typical cities and roads across the country; based on the multi-terminal layout of cars, roads, clouds and full-stack product system, Shangtang Shadow platform is expected to seize the opportunity to form a larger-scale industrial landing at this stage.
Foundation: full stack of product capacity, strong support of large devices. The SenseAuto Shadow Intelligent vehicle platform is based on the SenseCore Shantang AI device and takes the SenseAuto Empower Shadow enabling engine as the base. The whole stack system is composed of intelligent cabin, mass production intelligent driving, autopilot connection and vehicle-road coordination. We believe that although Shangtang is not a car company, it does not need to build a car, which enables Jueyin to devote more energy and resources to the research and development of "self-driving" itself. as a result, it is expected to have more powerful technical strength and development power than car companies. Compared with Tesla, Inc., whether in terms of data storage capacity, the number of network parameters of the large model, or computing power, Shangtang has a stronger competitive advantage. Under the blessing of Shangtang Shadow platform, through joining hands with Chinese car companies, the overall market space is far broader than Tesla, Inc..
Profit forecast and investment advice. Corresponding to the advantages of high gross margin and high product ability of the leading AI company, we give the company 16.5-18.5 times PS in 2023, corresponding to the reasonable value range of HK $4.08-4.58 Hong Kong dollars (HK $1 = 0.8596 RMB), which is rated as "better than the market".
Risk hint. The risk that the commercialization of AI is not as expected, the risk that the company's international expansion is not as expected, and so on.