Peace viewpoint:

The first unit of marine tourism is the transformation of the dual main business of "cognition + tourism". Originally mainly engaged in marine tourism transportation and tourism services in the Beibu Gulf region, in September 2016, the company acquired a 100% stake in Kangkang Intelligence (later renamed Xinzhi Cognition) to enter the cognitive solution business. On July 25, 2018, the abbreviation of the company's securities was changed from "Beibu Gulf Brigade" to "New Intelligence Cognition". At present, the company has developed into a diversified enterprise engaged in industry cognitive solution business with intelligent security, intelligent transportation and smart tourism as the core, and tourism service business based on tourism route resources.

Relying on shareholders to expand cognitive business, the second generation succession is expected to bring new development. The actual control is Mr. Wang Yusuo, founder of Xinao Group, who controls four listed companies. The New Austria Group has a natural gas layout in more than 100 cities across the country and has good government-enterprise relations, while Xinzhi Cognition (a subsidiary of a listed company) is headquartered in Shanghai, and before the acquisition, it mainly carried out business in first-tier cities such as Shanghai and Beijing. after being acquired, it can make use of the resources of New Austria Group to expand its business in second-and third-tier cities. In May 2018, Mr. Wang Zizheng, the son of Mr. Wang Yusuo, became the new chairman of the company. coupled with the renaming of the company, it is expected to bring new development of the company's business.

Cognitive business: based on intelligent security + intelligent transportation, explore smart tourism. Xinzhi Cognition is China's leading provider of cognitive solutions for intelligent safety and intelligent transportation industry, participating in a number of heavyweight projects, with a prominent position in the industry. The company's three core technologies are the key technologies of image analysis and content retrieval, the key technologies of data management and mining application, and the application technology of big data, which is expected to be copied to the field of intelligent tourism and develop in coordination with the company's tourism business. At present, the company has completed the establishment of a smart tourism service team and completed more than 100 business scenes. With the help of technological advantages and the market strength of New Austria Group, the company's orders have increased steadily, and the business area has expanded from North and East China to Central and Southwest China. At present, product sales and system integration are the main sources of income, and the proportion of software sales with high gross profit margin is expected to gradually increase in the future, which will further enhance the profitability of the company.

Tourism business: take three routes as the core, develop scenic spot resources at both ends of the route. The company's tourism business includes tourism transportation, tourist scenic spots and tourism service business, of which tourism transport business is the main source of income, accounting for 76% of revenue in 2017, while tourist scenic spots and tourism service business account for 14% and 10% respectively. Among them, the three major route businesses are ushering in a positive trend: 1) the increase in the upper limit of the number of passengers on Weizhou Island and the development of tourism resources at both ends of Weizhou Island and land will promote the increase in the number of passengers of the Beili route; 2) the collective price increase of the Pengchang route by 50%. The profit of the route is expected to increase by more than 20 million yuan; 3) the vicious competitive environment of the South China Sea route is improved, and luxury passenger ships are put into operation, which is expected to turn losses into profits. The business of the scenic spot strips off the loss assets and focuses on the high-quality assets: 1) the divestiture of the loss scenic spot will reduce the loss by about 40 million yuan and increase the investment income by about 10 million yuan; 2) the upgrading and development of Longhushan scenic spot and Beihai scenic spot.

Profit forecast and investment advice: it is estimated that the net profit from 2018 to 2020 will be 377 million yuan, 454 million yuan and 545 million yuan respectively, with year-on-year growth rates of 40.0%, 20.4% and 20.0%, respectively. At present, the stock price corresponds to 15.7,13.1 and 10.9 times of PE. It is estimated that the net profit of Xinzhi Cognitive business in 2018 is about 198 million yuan, and the net profit of tourism business is 179 million yuan. The average PE of similar companies in cognitive business was 24 times in 2018, and the average PE of similar companies in tourism was 24 times in 2018. If we give the average valuation of cognitive business and tourism business respectively, that is, 24 times PE, then the reasonable market capitalization of Xinzhi Cognition should be 9 billion yuan. At present, Xinzhi has a market capitalization of 6 billion yuan, the valuation is on the low side, and all businesses are in a good trend, covering it for the first time and giving it a "recommended" investment rating.

Risk tips: 1. Competition and technological innovation risk. With the arrival of the era of "cloud networking +", cloud networking enterprises have entered the fields of intelligent security, intelligent transportation and smart city, and the traditional information construction manufacturers are facing the challenge of cloud networking enterprises. The development of industry cognitive solution technology is changing with each passing day, and new technologies, new products and new applications are constantly emerging. if the ability of technological innovation can not continuously meet the needs of business development, it will adversely affect the continuation of Xinzhi's cognitive competitive advantage. 2. Risk of accounts receivable. The main customer groups of the industry cognitive solution business include public security, traffic management departments and system integrators who provide services for public security and traffic management departments. Affected by the long settlement cycle and other industry characteristics, the industry cognitive solution business needs to advance funds to carry out related business. If the local budget is tight and the financial situation of customers is deteriorating, Xin Zhi Cognition may still face the risk that accounts receivable cannot be collected or that the payment time is too long. 3. The bad weather affects the risk of business performance. Due to the influence of natural weather conditions, reduce the willingness of tourists to travel, bad weather, such as typhoons, tsunamis, landslides and other climate, geographical changes and other force majeure has a negative impact on marine routes and scenic spot operations.