Incident: The company released its 2022 annual report and 2023 quarterly report. In 2022, the company achieved revenue of 2.41 billion yuan, an increase of 51.0% over the previous year; net profit of the mother was 260 million yuan, an increase of 181.4% over the previous year; after deducting the net profit of the non-return mother of the mother, an increase of 182% over the previous year; and plans to distribute a cash dividend of 3 yuan (tax included) for every 10 shares to all shareholders. 2023Q1, the company achieved revenue of 720 million yuan, an increase of 38.5% over the previous year; Guimu's net profit was 92.31 million yuan, an increase of 106.6% over the previous year.

Structural optimization+scale effects have been highlighted, and profitability has been greatly improved. In 2022, 1) By business, the company's comprehensive system solutions/intelligent software and hardware products/after-sales operation and maintenance service businesses achieved revenue of 1.57 billion yuan (yoy +31.3%) /640 million yuan (yoy +136.3%) /200 million yuan (yoy +55.7%) respectively. Among them, orders for after-sales operation and maintenance services were added by 290 million yuan, maintaining rapid growth; its gross margin reached 46.6%, far higher than the company's comprehensive gross profit margin. Along with business expansion, it is expected to promote an upward improvement in overall gross margin. 2) On the profit margin side, the company's gross margin was 27.72%, an increase of 3.41 pp over the previous year, mainly due to scale effects, increased delivery capacity, and rapid growth in high-margin operation and maintenance business. The net interest rate was 10.69%, an increase of 4.95 pp over the previous year, and the fee control effect was outstanding. 3) On the cost side, the company's sales, management, and R&D expenses rates were 4.03% (yoy-0.81 pp), 4.63% (-1.47 pp), and 6.88% (+1.17 pp), respectively.

The new energy, petrochemical and tobacco industries continue to make breakthroughs, and the number of orders is abundant. In 2022, the company focused on deepening the new energy, tobacco and petrochemical industries, achieving revenue of 1.75 billion yuan, 380 million yuan, and 170 million yuan respectively, accounting for 72.6%, 15.8% and 7.0% of revenue. 1) New energy industry: Continued to receive orders from important customers such as BYD, Ningde Shidai, and Sunwanda, with additional orders of 3.10 billion yuan, an increase of 17.0% over the previous year. 2) Petrochemical industry:

The company won bids for several benchmark projects and placed an additional order of 630 million yuan, an increase of 1207.7% over the previous year, achieving a historical breakthrough. 3) Tobacco industry: New orders of 5.2 billion yuan were added, an increase of 14.6% over the previous year.

Leading smart logistics enterprise, policy and demand drive rapid growth. In December 2022, the State Council issued the “14th Five-Year Plan for Modern Logistics Development”, which proposed speeding up the digital transformation of logistics, promoting intelligent logistics transformation, etc., and further boosted industry sentiment. At the same time, against the backdrop of rising land costs and labor costs in China, the return on investment in digitalization of enterprises is high. Extensive use of intelligent software and hardware equipment such as industrial robots, laser scanners, and production control software has become a key path for manufacturing enterprises to reduce costs and increase efficiency, and demand for automation and digitalization has increased. As a leading enterprise in the field of smart logistics, the company has accumulated rich experience in the industry and has a prominent benchmark effect. It is expected that it will fully benefit from policies and demand for two-wheel drive, and orders will continue to increase.

Profit forecasts and investment recommendations. It is estimated that 2023-2025 EPS will be 1.23 yuan, 2.01 yuan, and 2.91 yuan respectively, and the corresponding dynamic PE will be 15 times, 10 times, and 7 times, respectively. Considering the company's abundant orders in hand, the scale effect is evident, and profitability continues to improve, maintaining the “buy” rating.

Risk warning: demand from downstream enterprises falls short of expectations, increased risk of industry competition, risk of accounts receivable recovery.