The company recently released its half-year 2023 results KuaiBao: 2023H1 achieved revenue of 277.7952 million yuan, an increase of 27.61% over the same period last year, a net profit of 98.3898 million yuan, an increase of 43.38%, and a net profit of 89.6311 million yuan after deduction, an increase of 51.30% over the same period last year. In this regard, our comments are as follows:
Main points of investment
Economic recovery superimposed cost reduction and efficiency increase to achieve double increase in revenue and profit
The company achieved a high increase in revenue and net profit in the first half of 2023, on the one hand, because the company increased the ETC distribution and promotion of offline outlets, cooperation channels and online platforms, optimized the ETC product system, and the circulation led to an increase in sales revenue. At the same time, highway traffic increased significantly, resulting in a substantial increase in electronic toll service income. In the first half of the year, the revenue of the intelligent transportation electronic toll collection business segment reached 173.8934 million yuan, an increase of 37.95% over the same period last year. On the other hand, because the company further strengthens the market expansion of supply chain collaborative services and drainage business, the intelligent transportation derivative business sector achieved an income of 13.0558 million yuan, an increase of 138.01% over the same period last year. In addition, the company continued to carry out lean management and cost reduction and efficiency special work to further improve cost control and management capabilities. The gross profit margin of the main business in the first half of the year was 53.02%, an increase of 4.6 percentage points compared with 48.42% of the main business in 2022.
Front installation & expansion outside the province to increase the market share of ETC issuance, the recovery of high-speed travel led to the steady recovery of traditional business
ETC distribution and sales business: although the installation rate of ETC has reached 80% (data at the end of 2019), there are still drivers for the future development of the ETC distribution industry: 1) annual new car sales (26.86 million in 2022); 2) used car transactions (16.02 million in 2022). As the only ETC issuing service organization in Jiangsu Province, on the one hand, the company continues to consolidate the market position of Jiangsu region by relying on monopoly advantages, and at the same time, it grabs the market through online issuance. On the other hand, actively cooperate with 14 mainframe factories such as SAIC Changan and Fuyao Glass Industry Group to layout the market opportunities of ETC front installation in advance, and at the same time combine the opportunities of Internet issuance to expand non-provincial markets to increase market share. In 2022, the company newly developed 1.28 million ETC users, accounting for 9.3% of the new market in the country. Electronic toll service business: with the economic recovery, high-speed travel is expected to pick up, and ETC payments gradually infiltrate from highways to parking, refueling and other car-related scenes, leading to a steady recovery of electronic toll service business.
Occupy scarce traffic data, lay the foundation for the commercialization of data elements, deeply plough the field of transportation industry, the company occupies a large number of scarce traffic data, by the end of 2022, the number of ETC users has reached 22.15 million, and the ecosystem built around ETC+ will generate a lot of data. The company has provided customers with the same services of drainage and supply chain cooperation by building models and integrating insurance, banking and other financial institutions. The business model has been recognized by the market.
In addition, the cloud products of the intelligent transportation operation management system integrate a large number of traffic incident information and related data across the country. Among them, the dispatching cloud platform has accumulated a wealth of detection data and event cases by accessing the traffic video data portals of major provinces and cities. The platform accumulatively handled more than 600,000 traffic accidents and stored nearly 3 million pieces of information on the intelligence board. The company has a large number of traffic data, which provides a basis for the value and commercialization of traffic data in the future, and is expected to become a new performance growth pole of the company.
Profit forecast
It is predicted that the company's net profit from 2023 to 2025 is 2.08,2.66 and 330 million yuan respectively, and the EPS is 0.51,0.65 and 0.81 yuan respectively. The current stock price corresponds to 44,35 and 28 times PE respectively, maintaining the company's "buy" investment rating.
Risk hint
The risk of lower-than-expected policy promotion and implementation of data factors, the risk of lower-than-expected downstream demand, the risk of intensified industry competition, macroeconomic downside risks, etc.