Key points of investment

Incidents: The company achieved revenue of 1,752 million yuan in 2022, an increase of 2.62%; realized net profit of 182 million yuan, an increase of 16.05% over the previous year; realized net profit of 161 million yuan, an increase of 28.97% over the previous year.

In the first quarter of 2023, the company achieved revenue of 420 million yuan, an increase of 3.05%; realized net profit of 53 million yuan, an increase of 7.64% over the previous year; and realized deduction of non-net profit of 50 million yuan, an increase of 15.62% over the previous year.

Performance is growing steadily, and smart shipping is growing rapidly. The company's performance in 2022 grew steadily. Among them, transportation was still the company's largest revenue share, achieving revenue of 1,164 billion yuan, a year-on-year decrease of 4.98%; smart shipping was the company's key business for transformation and upgrading, achieving revenue of 281 million yuan, an increase of 46.70% over the previous year; and smart logistics/security achieved revenue of 306 million yuan, an increase of 5.64% over the previous year.

Gross margin remains stable, and cost side control is better. The company achieved a gross profit margin of 20.42% in 2022, an increase of 1.21pcts over the previous year. The sales/management/R&D expense ratios were 1.48%/5.49%/3.38% respectively, with a year-on-year change of -0.14/-0.45/-0.71 pcts, and the overall cost ratio decreased by 1.30 pcts. The company's total number of employees in 2022 was 938, an increase of 62 over the previous year, an increase of 7.08%; of these, 476 were R&D personnel, accounting for 50.75%, an increase of 66 over the previous year, an increase of 16.10% over the previous year.

With an in-depth layout of smart shipping, the shipping group empowers development. The company has built solutions covering all fields of informatization and digitalization of shipping logistics. Currently, it has multi-scenario products such as Ship Shibao, Shipping Management Platform, and Fuel Saver. The company is a digital innovation and construction platform for COSCO SHIPPING Group. In 2022, the company's smart shipping business grew 47% year on year, and plans to have related transactions of 1.05 billion yuan in 2023, up 68% year on year. It is expected to meet the digital needs of COSCO SHIPPING in the future, and there is a lot of room.

Profit forecast and investment suggestions: According to the company's latest financial report, net profit from the return mother is expected to be 2.42/3.32/447 million yuan in 2025, giving it an “increase in holdings” rating.

Risk warning: The risk that the company's performance falls short of expectations, industry progress falls short of expectations, and demand falls short of expectations.