Events:

Recently, it has been granted a number of invention patents, and the research and development achievements are fully demonstrated. According to the company announcement, as of the date of release of this report, the company and its subsidiary Shenhong Intelligence have obtained a total of 21 invention patents since June 2023. Among them, the patent of "patrol image acquisition method and device, electronic equipment, storage medium" helps to quickly obtain the inspection image corresponding to each inspection point, improve the inspection efficiency, and has been applied to the company's related products. In the field of power grid, the company promotes patents such as "automatic intelligent inspection method based on substation work" and "transmission line inspection robot". In the field of rail transit, the company launched the patent of "rail patrol robot based on dual-track centring detection", which can specially detect the poor ride comfort of the rail surface and the deformation of the rail waist, with high detection efficiency.

Years of deep ploughing to build technical barriers, continuous research and development to consolidate the leading advantage. Intelligent inspection robot product research and development integrated automatic control, artificial intelligence and other technologies, with high technical barriers. The company has been deeply engaged in the field of smart grid for more than 15 years and has formed a core technology system including artificial intelligence and robot technology. By the end of 2022, the company and its wholly-owned subsidiaries had been granted a total of 352 patents, including 80 invention patents and 180 utility model patents, and 86 new patents were granted in 2022.

The company maintains strong R & D efforts, with R & D expenses increasing by 48.45% to 128 million yuan in 2022 compared with the same period last year.

The downstream demand is strong, and the company has a broad space for future development. In the field of power grid, smart grid will become the focus of power grid construction in China for a long time in the future, and related industries such as power equipment testing have a broad market space. State Grid announced that it will invest more than 520 billion yuan in power grid in 2023, with a structure tilted towards intelligence, digitalization and UHV. In the field of rail transit, the contradiction between the aging of rail transit equipment and the shortage of operation and maintenance personnel has become increasingly prominent. Rail transit operation and maintenance, railway and urban track detection and maintenance are facing the needs of digital and intelligent transformation and improving efficiency and precision. Intelligent robots and intelligent detection and control equipment have a vast market space.

Investment rating: the company's net profit from 2023 to 2025 is expected to be 190 million yuan, 269 million yuan and 355 million yuan respectively, corresponding to PE 23x, 16x and 12x respectively.

Risk tips: power grid investment is not as expected; rail transit business development is not as expected; new technology research and development process is not as expected; profit forecast and valuation failure.