The revenue of the company's intelligent transportation operation and management system has increased rapidly, and the company's performance in 23 years will be accelerated in an all-round way. We estimate that the company's net profit in 2023-2025 is 2.62 billion yuan, which is corresponding to the PE37/28/21 times of 2023-2025. Maintain the "highly recommended" investment rating.

Event: the company released its annual report of 2022 and quarterly report of 23 years, and its revenue in 2022 was 597 million yuan, an increase of 0.62% over the same period last year, and its net profit was 151 million yuan, down 19.62% from the same period last year. The deduction of non-net profit was 140 million yuan, down 14.70% from the same period last year. 23Q1 achieved revenue of 133 million yuan, an increase of 16.84 percent over the same period last year, a net profit of 41 million yuan, an increase of 33.20 percent, and a deduction of 41 million yuan for non-net profit, an increase of 36.38 percent over the same period last year.

The ETC business income is affected by the epidemic, and the intelligent transportation operation management system income increases rapidly. In 22 years, the company's intelligent traffic electronic toll business / intelligent traffic operation and management system business / intelligent transportation derivative business achieved revenue of 302 yuan, respectively, up-16.54%, 28.13% and 14.52%, respectively, from a year earlier. The decline of the company's ETC business revenue in 2022 is mainly due to the impact of the epidemic on highway traffic in 2022, which in turn affects the revenue scale of the company's electronic toll collection business. The high business income of intelligent transportation operation and management system in 2022 mainly benefited from the increase in the category of intelligent transportation application products and the continuous expansion of the company's business outside Jiangsu province. In 2022, in addition to dispatching cloud and other mature products, the company launched new applications such as AI video analysis cloud control platform and free streaming cloud charging solution to further expand the company's business scope and growth space. In addition, the company's maintenance cloud, dispatching cloud and other products have been applied in Guizhou Expressway, Shenzhen Expressway and other provinces and cities, and the series of intelligent traffic operation and management system products have been extended to 18 provinces and cities across the country. Under the five-year Plan of Traffic Power, it is expected that the company's intelligent traffic operation and management products led by dispatching cloud will accelerate its expansion outside Jiangsu Province and open a broad space for various data applications.

The growth rate of 23Q1 performance has resumed, and the company's performance for the whole of 23 years is expected to accelerate in an all-round way. The company's 23Q1 realized revenue growth of 16.84%, of which intelligent transportation electronic toll collection business / intelligent transportation operation management system business / intelligent transportation derivative business realized revenue of 8367.56 yuan, respectively, with an increase of 13.61% 12.39% and 129.07%, respectively. On the one hand, the growth of 23Q1 revenue is due to the continuous expansion of intelligent transportation operation and management business, on the other hand, due to the company's increased efforts to issue and promote ETC, and the obvious increase in highway traffic after the epidemic, which leads to an increase in electronic toll service income. The further recovery of the company's electronic charging business after the epidemic will accelerate the growth, intelligent transportation operation and management business downstream for government customers, the peak of project acceptance confirmation has not yet arrived, and the company's 23-year performance growth is expected to further accelerate.

The company has scarce traffic vertical data and will benefit from the market construction of data elements. By the end of 22, the company had developed about 22.15 million ETC users to master vehicle information and track data involved in the distribution and charging of ETC; on the other hand, the company's dispatching cloud platform covered eight functional modules, such as video surveillance, information board and voice, and had successfully connected to traffic video data portals in many provinces and cities, and accumulated rich highway video, images and event data. With the establishment of the National data Bureau to further promote the construction of the data element market, the company has a space for the future application of scarce traffic vertical data.

Maintain the "highly recommended" investment rating. The revenue of intelligent transportation operation and management system has increased rapidly, and it is expected that the company's revenue will accelerate in an all-round way in 23 years. With the continuous precipitation of the company's product-based business and the gradual completion of innovative business research and development, the overall cost growth rate of the company will be narrowed, bringing a substantial increase in profits for 23 years. We estimate that the company's net profit in 2023-2025 is 2.62 billion yuan, which is corresponding to the PE37/28/21 times of 2023-2025. Maintain the "highly recommended" investment rating.

Risk hints: policy promotion is not as expected; macroeconomic change risk; intelligent transportation operation management system business development is not as expected; high proportion of restricted shares may lead to stock price volatility risk; epidemic repeated risk.