Incident 1: The company released the performance forecast for the first quarter of 2023. Net profit attributable to the mother is expected to reach 264-266 million yuan in 23Q1, an increase of 70.0%-71.5%; after deducting non-net profit of 261-264 million yuan, an increase of 80.0%-82.1%.
Profit increases were achieved at the bottom of the industry boom, and the company's business model was continuously verified. According to statistics from the National Bureau of Statistics, the value added of industries larger than China in January-January was 2.4% (expected 3.0%), and the overall industrial recovery fell short of expectations. Production processes in major factories were based on prior orders, and capacity recovery after the epidemic had a certain time lag compared to the demand side. At the bottom of the industry boom in the first quarter, company profits increased again, fully verifying the resilience of the company's business model. Profitability may continue to be strengthened in the future as macro-level restoration and the company's voice in the industrial chain continues to increase.
Incident 2: On April 9, 2023, the company published the article “AI Empowers the Industrial Internet and Opens a New Chapter in Industrial Digitalization” on its official account. According to the article, the company has now achieved research and implementation of intelligent applications in various fields: 1) Intelligent recommendation: through analysis of user behavior and preferences, relying on machine learning to provide targeted product recommendations; 2) Sales forecasting: through integrated multi-dimensional data analysis, it is possible to predict future demand/supply trends in vertical industries in 1-3 months; 3) Cloud factory/cloud warehouse production monitoring:
Based on visual technology, the production process in the cloud factory is monitored in real time through sensors, etc. We believe that with the subsequent promotion of meta-enterprises and the introduction of other types of GPT models (Wen Xin's words, etc.), the company's digital intelligence empowerment system will be more diversified and improved, and the moat effect is expected to be further strengthened and consolidated.
The direction of “intelligence” in the industry is clear, and the verifiability of value is higher than that of the C side. 1) The downstream consumer Internet is highly fragmented, and demand preferences vary widely. It is difficult for digital intelligence empowerment to take into account demand at a single point. It is more likely to cause problems such as distorted predictions and misalignment of empowerment. The actual value of technology applications is difficult to measure; 2) The downstream procurement volume of the industrial Internet is large, and the products have high standardized characteristics. Intelligent applications mainly focus on solving problems such as upstream and downstream production cycle matching and product supply stability. Achieving dynamic supply and demand optimization of the product structure under existing demand can reduce costs and increase efficiency to a large extent, and application value is more certain than the C-side. In addition, B-side customer demand is converging with the industry as a whole, and products such as reverse customization are more adaptable. Risks such as distorted predictions and misalignment of empowerment are also lower than on the C side.
The company has the advantage of storing scarce data, and the cloud factory may push the company to achieve business outreach. Based on open source sharing, the current technical barriers to smart big models have been gradually reduced. The bottleneck in actual development is that the data required for the model is scattered and difficult to obtain, and the quality and quantity are difficult to support model training and iteration. However, the company also has transaction data (multiple platforms) and production and operation data (digital cloud factory/Guolian cloud) reserves, and has full-chain data integration capabilities that are scarce in the industry, which has formed a data card advantage. At present, the company has joined the Beijing International Big Data Exchange Alliance. In the future, relying on existing platform data and the in-depth accumulation of production and operation data related to cloud factories, it may help the company achieve data business outreach and create a new growth curve.
Profit forecast: The company's business is developing steadily, the stickiness of supply chain relationships continues to strengthen, and the leading position in the industry is stable. The implementation of superimposed intelligent applications catalyzes valuation restoration. The company's revenue is expected to be 724.4/1,243.7/201.29 billion yuan in 2022-2024, an increase of 94.6%/71.7%/61.9%; the net profit of the mother is 11.3/19.8/3.23 billion yuan respectively, an increase of 95.5%/75.2%/63.2%; the corresponding PE is currently 31/18/11X, maintaining the increase rating.
Risk warning: Industrial product prices fluctuate greatly; financing process falls short of expectations; cloud factory put into use falls short of expectations