Peace viewpoint:
Over the years, the company's performance has basically maintained a steady growth trend: the company is the leading domestic transportation information enterprise, covering highway informatization, port shipping informatization, urban intelligent transportation, intelligent security and other fields. Due to the high correlation between the company's main business and infrastructure construction, the revenue growth rate fluctuates greatly, but in recent years, the growth of net profit is basically stable, and the gross profit margin of each business has not fluctuated significantly in the past three years.
The company is a professional highway information supplier: the company is one of the few listed companies most focused on the field of highway information in China. The company has business in more than 20 provinces across the country, and has a huge competitive advantage in Anhui Province, accounting for more than half of the market share. According to the 13th five-year Plan, the mileage of expressways during the 13th five-year Plan period will reach about 150000 km, and CAGR will be about 4%. According to this, it is estimated that the scale of highway information market can be maintained at more than 15 billion yuan per year, and the operation and maintenance project of existing roads will become a new growth point. In addition, the company is also involved in the vehicle networking business, committed to the research and development of V2X technology to achieve vehicle-road coordination, the company's road test equipment launch system has been patented.
The company has an absolute advantage in the field of port shipping information: the company is involved in the field of port shipping information through the wholly-owned acquisition of East China Electronics. East China electronic products cover the dock yard, ground pumps, belt transmission, card collection transportation and many other links, are used in 90% of the ports in the country, strong profitability, and occupy an absolute advantage in the domestic port shipping information market. The company's main products, general bulk cargo terminal operating system and computer intelligent container terminal operating system, occupy 70% and 60% of the national market share respectively. At present, the company is following the national "Belt and Road Initiative" strategy, opening up overseas markets focusing on Africa and Latin America, and is planning to set up a joint venture in Cuba.
The company expands the layout of the industrial chain with "Internet +" business: under the background of vigorously promoting "Internet +" by the state, the company launched the "Internet +" business in 2015, laying out two directions of "Internet + Traffic" and "Internet + Port Shipping". In order to extend the company's coverage in the industrial chain and fully tap the potential value of traditional business. At present, the company has launched "Xingyun World" mobile application and official account, "Tuotuanbao" logistics platform and "Haiyitong" supply chain financial platform, the business development is good, and it is expected to be successful in the market segment in the future.
The company actively seeks extension development opportunities: in recent years, the company has planned three major asset injections, involving Anhui Radio and Television Group, soft Power and other high-quality enterprises. Although the three plans were terminated for some reason, after the end of the six-month commitment period, the company is expected to continue to seek to place high-quality assets through mergers and acquisitions, which are expected to be targeted at IT peers, especially Chinese-listed stocks seeking to return to A-shares, while the existing major performance business will continue to be retained in the form of subsidiaries under the listed company.
Profit forecast and investment advice: the EPS of the company from 16 to 18 is expected to be 0.24,0.29,0.36 yuan respectively, and the PE corresponding to the closing price on September 12 is 56.1,46.3,38.1 times respectively. We believe that the company has obvious advantages in terms of technology, experience and customer resources in market segments, and is optimistic about the company's strategic deployment in business development and efforts to seek extension growth. We are optimistic about the company's development prospects, covering it for the first time and giving it a "recommended" rating.
Risk hints: the scale of infrastructure investment in the transportation sector has shrunk, the growth rate of the incremental market has slowed down; competition in the industry has intensified, business expansion has been hindered; policies related to restructuring and mergers and acquisitions have changed, and the way of company extension development is limited.