occurrences
On the evening of November 21, Lion Technology announced that the company will establish “Xinjiang Tangli Technology Technology Co., Ltd. through friendly negotiations with Shenzhen Shangtang Technology Co., Ltd. through friendly negotiations with Shenzhen Shangtang Technology Co., Ltd. to jointly establish “Xinjiang Tangli Technology Technology Co., Ltd. in Urumqi Economic Development Zone in Xinjiang through strong cooperation, joint expansion of artificial intelligence markets within and outside the country, and seizing a high ground of competition.” The company invested RMB 7.35 million, accounting for 49% of the joint venture's shares; Shangtang Technology invested RMB 7.65 million, accounting for 51% of the joint venture's shares. The initial investment was 5 million yuan, which was simultaneously and simultaneously deposited by all parties in a proportional manner into the bank account opened by the joint venture company.
Joining hands with Shangtang Technology to strengthen the competitiveness of the company's products and services using AI technology, the joint venture positioned itself as a technology-based company that provides artificial intelligence products and integrated solutions, and formed a market sales scale. The initial focus was on expanding the security market, with the goal of growing into a first-class smart security product service provider in China. The company mainly provides market channels, relationship maintenance, business plans, and project implementation. Shangtang Technology mainly provides standardized and customized products, technical solutions, and technical support before, during and after sales. The two sides have jointly built a technology-based company integrating R&D, development, sales, project implementation, technical support and after-sales service capabilities.
Shangtang Technology is a leading AI image recognition manufacturer in China. Empowering many industries and customers Shangtang Technology has established cooperation with many well-known strategic partners and major customers, empowering AI in many industries, and rapidly implementing various application technologies including face recognition, image recognition, video analysis, driverless driving, and medical image recognition. The company has now served more than 400 customers, including well-known enterprises and government agencies such as China Mobile, UnionPay, Central Network Information Office, Huawei, Xiaomi, OPPO, Weibo, etc. In addition, Shangtang Technology uses artificial intelligence technology to serve customers such as major security monitoring companies, banks and financial institutions, mobile phone manufacturers, robot manufacturers, many mobile app manufacturers, and government public security.
Security and AI technology complement each other. Relevant progress is worth paying attention to. Currently, the security industry is dominated by video surveillance. There is a large amount of video-related data, which can bring relevant training resources to AI technology. Furthermore, the characteristics of proactive prevention, in-incident response, and follow-up in security also match the algorithms and technology of artificial intelligence. The characteristics of the security industry complement AI technology. Currently, intelligent security has application scenarios in various fields such as public security, transportation, buildings, finance, industry, and civil use, but it has not yet reached the stage of actual practical application. There are still many problems that need to be continuously improved and solved, such as poor environmental adaptability, limited scene understanding, and face recognition accuracy. Progress on related issues in the next few years is worth paying attention to.
Investment advice
Considering strong demand for stability and safety construction in Xinjiang, we expect the company's profits for 2017-2019 to be 0.77, 1.17, and 174 million yuan respectively, and EPS of 0.75, 1.14, and 1.70 yuan respectively. The current stock price corresponding to PE from 17-19 is 58.2, 38.4, and 25.7 times, respectively. Maintain a “Recommended” rating.
Risk warning: business progress falls short of expectations, competition intensifies