Incident: On the evening of April 24, the company released the 2022 & 2023Q1 financial report. The company achieved revenue of 2,413 million yuan (YoY +50.99%) in 2022, net profit of 258 million yuan (YoY +181.41%); the company achieved revenue of 724 million yuan (YoY +38.47%) in the first quarter of 2023, and net profit of 92 million yuan (YoY +106.63%).

The number of on-hand orders has increased rapidly to ensure the long-term growth of the company's performance. In recent years, driven by the demand of enterprises to reduce costs and increase efficiency, the prosperity of the smart warehousing industry has continued to rise. The company is deeply involved in the three fields of new energy lithium batteries, tobacco, and petrochemicals. By the end of 2022, the company had unconfirmed revenue orders of 5.450 billion yuan, and additional orders of 4.374 billion yuan in 2022 (3.104 billion yuan for new energy, 523 million yuan for tobacco, 625 million yuan for petrochemicals, 122 million yuan for others). The high growth in on-hand order volume has laid a solid foundation for the company's continued high-quality development over the next year or two.

Competition barriers are gradually being strengthened, and gross margin continues to rise. The company's consolidated gross margin in 2022 was 27.72% (YOY+3.41PCT), and the 2023Q1 comprehensive gross margin was 30.89% (YOY+5.37pct). We believe that the increase in the company's comprehensive gross margin comes from two points. First, the proportion of the company's high-margin software and hardware products increased 9.53 pct year on year; second, with the continuous strengthening of the company's own competitive barriers, the gross margin of the company's various businesses increased. Among them, the gross margins of integrated system system solutions, intelligent software and hardware products, and after-sales operation and maintenance services increased 1.92pct, 3.71 pct, and 2.49pct, respectively. The increase in corporate barriers comes from the company's deepening commitment to various industries. Since its establishment, the company has completed hundreds of large-scale smart logistics projects and intelligent manufacturing projects in more than 40 industries. In the future, the company will also further consolidate the company's barrier advantage by increasing investment in R&D and continuous technological innovation.

The policy continues to drive the development of the industry, and the smart storage industry is booming. In the “Guide to Building an Intelligent Manufacturing Standard System for the Nonferrous Metals Industry (2023 Edition)” issued by the Ministry of Industry and Information Technology, it is clearly stated that intelligent warehousing & logistics is one of the priorities of smart factory construction. Under the general environment of the digital economy, smart warehousing & logistics may also become one of the key points and assessment points of digital factory construction. In the future, as construction guidelines for other industries are implemented one after another, the intelligent warehousing industry will develop rapidly under the impetus of policies.

Profit forecast and investment advice: The company's revenue for 2023-2025 is 34.90, 45.86, and 5.971 billion yuan, net profit of the mother is 3.99, 535, 709 million yuan, and EPS is 130, 174, and 2.31 yuan/share, covered for the first time, giving a “buy” rating.

Risk warning: Project construction progress fell short of expectations, industry competition intensified, and the actual controller was investigated