Items:

The company announced that its operating income in the first half of 2023 was 691 million yuan, an increase of 54.59% over the same period last year, with a net profit of 52.9612 million yuan and an EPS of 0.11 yuan.

Peace viewpoint:

The company performed brilliantly in the second quarter. According to the company announcement, the company achieved operating income of 691 million yuan in the first half of 2023, an increase of 54.59% over the same period last year, and realized a net profit of 52.9612 million yuan, turning losses into profits over the same period last year. The company achieved rapid revenue growth in the first half of the year and turned its net profit from loss to profit, mainly because the company increased market development in the first half of the year and actively promoted the progress of project implementation and acceptance. From a quarterly point of view, the company achieved revenue of 396 million yuan in the second quarter, an increase of 133.54% over the same period last year, and realized a net profit of 40.7744 million yuan, turning losses into profits over the same period last year. The company's performance in 2022 is under pressure, and the performance growth momentum is good in the first half of 2023. We are optimistic that the company's annual performance will resume growth in 2023. In terms of profitability, the company's gross profit margin in the first half of 2023 was 57.08%, an increase of 4.97% over the same period last year; the expense rate during the period was 49.15%, down 17.17% from the same period last year. The company's profitability in the first half of 2023 is significantly higher than that in the same period last year.

The company's leading position in GIS industry is stable, and its core competitiveness continues to enhance. The company is the leading enterprise in China's GIS industry. According to the data of American ARC Consulting Group, the company's GIS revenue ranks third in the world and first in Asia in 2021, among which the software business income ranks second in the world. The company's GIS industry leader position is solid. In the first half of 2023, the company entered the field of remote sensing production to create the integration of remote sensing GIS, and officially released the remote sensing software product-cross-platform remote sensing image processing desktop software [SuperMap ImageX Pro (Beta)], realizing the whole process processing and application of remote sensing GIS integration. The company combines the data obtained by satellite remote sensing with the analysis of geographic information system software, breaking the previous "separation" between remote sensing and geographic information system, and realizing the landing of the full chain application of remote sensing GIS, which will provide more powerful and efficient data support for many industries. At the same time, the company deepens technology integration and enhances AI empowerment. The SuperMap GIS2023 released by the company in the first half of the year, closely following the frontier of AI, integrates pre-training models represented by Transformer technology, and provides a variety of pre-training models for remote sensing image interpretation, which helps the innovative application of artificial intelligence. In the field of Xinchuang, the company continues to make efforts to build an independent and controllable ecology. In the first half of 2023, the company actively carried out multi-dimensional and multi-field adaptation certification with domestic ecological partners, and completed adaptation mutual certification with China Telecom Corporation Tianyi Cloud for the first time. At the same time, the company's SuperMap GIS series products and solutions complete compatible certification with Aliyun, Chaoyun, Feiteng, Yuanxin Technology, Zhongke controllable, Xinhua III, Cloud Axis Technology, etc., and deeply integrate mainstream Xinchuangyun platform, operating system, chips and other software and hardware products, jointly promote the industrial application and coordinated development of domestic basic software and hardware, and jointly create an independent controllable ecosystem. The company continues to innovate in product research and development, and its core competitiveness will continue to be enhanced.

The company's growth business development has achieved positive results, and the growth business will become a new engine for the company's future development. In the first half of 2023, the company actively promoted the growth business, expanded the strong GIS government application industry outside natural resources, and strived to achieve a breakthrough in To B business for enterprise applications. In the field of government-oriented application business, and in the field of water conservancy, the company has won the bid for the digital twin three Gorges simulation engine project, the three Gorges Group Chongqing Wushan County intelligent water GIS support software platform procurement project, Shandong Yellow River management and protection information platform optimization and upgrading project, Shaanxi Intelligent Yellow River project GIS procurement and other projects. Subsidiary Nanjing national map won the bid Pearl River Delta water resources allocation project water regime and water quality monitoring system project. In the field of meteorology, the company participated in the national scientific and technological innovation 2030-"New Generation artificial Intelligence" major project "Agricultural catastrophe risk Integrated Intelligent Analysis and decision Research" project, completed the research and development of a high-performance, high-availability and highly reliable agricultural catastrophe risk analysis and intelligent decision-making service platform, and deployed and operated in the big data cloud platform of the National Climate Center. Provide platform support and iterative optimization for application demonstration. The company won the bid in Beijing, Sichuan Province, Qinghai Province and other key projects such as meteorological disaster risk assessment and early warning business system along the Sichuan-Tibet Railway. For big data, the value of big data-related contracts increased by about 47% year-on-year, and participated in big data projects in Shanghai, Hangzhou, Zhengzhou, Linqing, Wuhu, Zhangjiagang, Luzhou, Ankang, Baise, Baiyin, Fuxin, Wuhan, Yichang and other places. In the field of enterprise application business, in terms of smart airport, the company is involved in the construction of Wuhan Tianhe Airport, Lanzhou Zhongchuan International Airport, Shenzhen Airport and other smart airport projects. In terms of wisdom park, the company participated in Lianyungang Petrochemical Industrial Park project, Baotou Aluminum Industrial Park Intelligence Park project, Dongyue Fluorosilicon Technology Group 3D Geographic Information system upgrade project, Zhongtian (Nantong) Iron and Steel Park project, Inner Mongolia Ordos Electric Power Metallurgical Group Industrial Internet Infrastructure networking upgrading project, Zhi Yangpu (Phase I) project, Heilongjiang Hulin Wisdom Park project and so on. In the first half of 2023, the expansion of the company's growth business has achieved positive results, and the company's growth space will be further opened in the future.

Profit forecast and investment advice: according to the company's semi-annual report of 2023, we adjust the performance forecast. It is estimated that the return net profit of the company from 2023 to 2025 is 283 million yuan (the previous value is 304 million yuan), 374 million yuan (the previous value is 401 million yuan), 502 million yuan (the previous value is 531 million yuan), and the EPS is 0.57,0.76 yuan and 1.02 yuan respectively. The PE corresponding to the closing price on Aug. 16 is 38.4,29.0,21.6 times respectively. The company is a leading enterprise in GIS industry in China, and its leading position is stable. The company continues to innovate in product research and development, and its core competitiveness will continue to be enhanced. At present, the expansion of the company's growth business has achieved positive results, and the company's growth space will be further opened up in the future. Although the company's performance in 2022 is under pressure, it has a good momentum of growth in the first half of 2023, and we are optimistic that the company's annual performance will resume growth in 2023. We are optimistic about the future development of the company and maintain the "recommended" rating of the company.

Risk tips: (1) the iterative progress of the company's GIS technology and product upgrade is not as expected. At present, the company has a clear lead in the field of domestic GIS technology, which has laid a solid foundation for the company to become a leading enterprise in the domestic GIS industry. However, if the company can not maintain a continuous lead in the field of GIS technology in the future, or the iterative progress of the upgrade of the company's GIS products is not as expected, the development of the company's GIS business will be less than expected. (2) the development of the company's natural resources business is not up to expectations. The company continues to make positive progress in natural resources registration, land and spatial planning and other business. However, if the market competition is fiercer than expected, there is a risk that the development of the company's natural resources business will not meet expectations. (3) the development of the company's growth business is not up to expectations. At present, the expansion of the company's growth business has achieved positive results, but if the future promotion progress of the growth business is lower than expected, then the company's growth business will not meet the expected risk.