Intelligent transportation platform-based solution provider, Jiangsu Traffic Holding Company, founded in 2016, is the country's leading provider of smart transportation platform-based solutions for highways, main highways, and urban transportation. Its main business includes three aspects: 1) Smart transportation electronic toll services using ETC as the carrier, including ETC distribution and sales, electronic toll service business, etc.; 2) Smart traffic operation management system business with cloud technology as a platform, including system software development, integrated solutions and system technology services for smart traffic operation management; 3) Intelligence The transportation derivative business mainly uses “ETC+” as the core to develop an ecological scenario, integrating vehicle life such as vehicle refueling, road area economy, car maintenance, etc., to develop the ETC ecosystem business. After the national policy promoted explosive growth in the number of ETC users in 2019, a return to a steady state began in 2020. The company's revenue increased from 466 million yuan in 2020 to 597 million yuan in 2022, CAGR was 13.19%, net profit in 2020 was 171 million yuan, net profit fell to 151 million yuan in 2022 due to the impact of the epidemic, and overall net profit in 2020-2022 did not fluctuate much. 2023Q1 achieved revenue of 133 million yuan (+16.84%), net profit attributable to 0.41 million yuan (+33.20%), and performance began to recover. The controlling shareholder of the company is Jiangsu Trading Investment, and the actual controller is the Jiangsu State-owned Assets Administration Commission.
Front-loading & expansion outside the province increased ETC distribution market share, and the recovery of high-speed travel led to a steady recovery in traditional business
ETC issuance and sales business: Although the ETC installation rate has reached 80% (end of 2019 data), there are still driving factors for the future development of the ETC distribution industry: 1) annual sales of new automobiles (26.86 million units in 2022); 2) used car transactions (16.02 million units). As the only ETC distribution service agency in Jiangsu Province, the company relied on its monopoly advantage to continuously consolidate its market position in the Jiangsu region. On the other hand, it actively cooperated with 14 OEMs including SAIC Changan and Fuyao Glass to lay out ETC front-end market opportunities in advance. At the same time, it combined Internet distribution opportunities to expand markets outside the province to increase market share. In 2022, the company developed 1.28 million new ETC users, accounting for 9.3% of the country's new market. E-toll service business: As the economy recovers, high-speed travel is expected to pick up, and the gradual penetration of ETC payments from highways into car-related scenarios such as parking and refueling will drive a steady recovery in the e-toll service business.
Products continue to be enriched and combined with SAAS services, and the smart transportation operation management system business is growing at a significant rate
The smart transportation operation management system business with cloud technology as a platform mainly relies on cloud intelligence and other technologies to develop and maintain smart transportation systems, effectively supports integrated traffic operation decision management and services, and focuses on the three major business scenarios of smart traffic command and dispatch, operation service, and comprehensive management. At present, it has formed seven major product systems of “dispatch, charging, maintenance, service, integrated management, digital intelligence, operation and maintenance”, and more than ten smart transportation cloud service series products with leading standards in China. Among them, dispatch cloud products have now been commercialized on a large scale and promoted throughout the country. At the same time, the company focuses on the development needs of digital transportation and continues to develop new products. Currently, the company is implementing projects such as AI video analysis cloud control platform projects and toll robots, which will become a new growth point for the company's performance. Furthermore, the scheduling cloud and SD-WAN networking service products provided by the company in Jiangsu Province have realized SaaS model billing (SaaS model revenue increased from 51.03 million yuan in 2021 to 103.47 million yuan in 2022), and the change in the charging model is conducive to the steady growth of the company's performance. The company's smart transportation operation management system business revenue increased from 47.16 million yuan in 2019 to 281 million yuan in 2022. The CAGR was 81.32%. The growth rate is quite obvious, and it is expected that it will continue to grow rapidly in the future.
Occupying scarce traffic data, laying the foundation for commercialization of data elements and deepening the transportation industry, the company occupies a large amount of scarce traffic data. By the end of 2022, the number of ETC users of the company has reached 22.15 million, 1,519 smart parking lots, and the ecosystem built around ETC+ will generate a large amount of data. The company has built a model and integrated financial institution products such as insurance and banks to provide customers with services such as drainage and supply chain collaboration. This business model has been recognized by the market.
Furthermore, the company's series of cloud control platform products can enable cloud aggregation, interactive sharing, integration and opening of various types of data. They have high-quality information and more traffic-related data on more than one million incidents across the country. This will provide strong data support for big data analysis such as road network management, travel services, vehicle and road collaboration, and the Luyan economy. The company's dispatch cloud platform covers eight major functional modules, including video surveillance, information boards, and voice. It has now successfully connected traffic video data portals in many provinces and cities, and has accumulated extremely rich monitoring data (road video, road conditions, etc.) and incident cases (emergencies, inspection incidents, etc.); the platform has handled more than 600,000 traffic incidents; it has stored nearly 3 million pieces of intelligence board information, nearly 10 million voice call recordings, tens of millions of vehicle model data, and more than 8 billion high-definition photographs. The company holds a large amount of traffic data, which provides the foundation for future valorization and commercialization of traffic data, and is expected to become the company's new performance growth pole.
Profit forecasting
The company's net profit for 2023-2025 is predicted to be 208, 2.66, and 330 million yuan respectively, and the EPS is 0.51, 0.65, and 0.81 yuan respectively. The current stock price corresponding to PE is 49, 39, and 31 times, respectively, maintaining the company's “buy” investment rating.
Risk warning
The risk that the promotion and implementation of data factor policies falls short of expectations, the risk that downstream demand falls short of expectations, the risk of increased industry competition, the risk of macroeconomic downturn, etc.