Summary:
Saiwei Intelligent is a leading artificial intelligence enterprise and smart city service provider in China. With artificial intelligence technology as the core, based on big data, and using smart city-related business fields as application carriers, the company has created advantageous products with independent innovation, such as Saiying drone, Fire Eye R-X1 inspection robot, face recognition terminal equipment, etc. Its wholly-owned subsidiary, Hefei Saiwei Intelligence, is a second-level confidential qualification unit for weapons and equipment research and production.
The field of artificial intelligence has mastered its core technology while continuously increasing scientific and technological research and development efforts, and it is expected that products will continue to be implemented. There are many technologies pioneered by companies in the drone field, which is the company's core competitive advantage. The company has various types of drones, such as large payloads, tethered, multi-rotors, fixed-wing, and helicopters. The large payloads are birotors, and the small payloads are mainly six-rotors. The company has a self-developed flight control system - autopilot and RE35H rotor engine, which won the Hi-Tech Fair Outstanding Product Award. Currently, companies in the field of robotics use service robots represented by inspection robots as their starting point. In addition, they have strategic cooperation with Osaka University, Waseda University, and UBC to focus on developing robots in health care.
The large amount of goodwill impairment in 2019 greatly reduced the pressure on the company's future goodwill impairment, and the future will go to battle lightly. In 2019, the company's goodwill depreciated by around 54-700 million, mainly due to mergers and acquisitions to form goodwill. Other mergers and acquisitions formed very little goodwill. Kaixin.com's games are distributed both domestically and internationally. Kaixin.com is more popular in Japan, Southeast Asia, South Korea and other countries. 50%-60% of revenue comes from abroad and is less affected by domestic game licenses. The company currently has a reputation of around 900 million. If it loses 700 million dollars in value in 2019, there will be less pressure to reduce subsequent depreciation.
Traditional businesses and artificial intelligence demand are working together, and there are plenty of on-hand orders, giving it an “increase in holdings” rating. Saiwei Smart's 2019 artificial intelligence orders were close to 1 billion. Among them, drone orders are about 900 million, robots are about 100 million, and face recognition is about 2-3 million. The company's artificial intelligence is expected to maintain a high net interest rate. The company's artificial intelligence products have application products in many fields. For example, inspection robots are not only used in power systems, but can also be used in data centers, underground integrated pipe galleries, etc. In addition, the company's smart city orders are around 1 billion yuan, and IDC's on-hand orders of 6 billion yuan can maintain revenue of 600-800 million yuan. The company currently has sufficient customer resources. We expect the revenue from 2019 to 2021 to be 1,171, 18.50, and 2,220 billion yuan respectively, and the net profit is expected to be -534, 368, and 438 million yuan respectively, corresponding to -11, 16, and 13 times PE, respectively, giving an “increase in holdings” rating.
Risk warning:
The development of artificial intelligence and smart city businesses fell short of expectations, and accounts receivable faced risks such as impairment.