Overview of events
On August 16, Dragon soft Technology released the 2023 half-yearly report. In the first half of 2023, the company achieved operating income of 139 million yuan, an increase of 20.82% over the same period last year, a net profit of 38.146 million yuan, an increase of 33.53% over the same period last year, and a net profit of 37.3855 million yuan, an increase of 30.53% over the same period last year.
Steady growth in performance, rapid growth in intelligent geological security and mining
According to the company announcement, 1) from the perspective of performance, the company's operating income in the first half of the year was 139 million yuan (+ 20.82%), and the net profit was 38.146 million yuan (+ 33.53%). In the second quarter alone, the company realized operating income of 85.8349 million yuan (+ 18.46%); the net profit of returning to the mother was 25.2309 million yuan (+ 30.34%); deducting the non-return net profit of 2457.80 yuan (+ 25.27%), the operating performance increased steadily. 2) from the business point of view: the company makes full use of the technical advantages, the management and control platform business continues to grow steadily, while realizing the rapid growth of intelligent geological guarantee system and intelligent mining business. In the first half of the year, the company's intelligent geological guarantee business achieved business income of 29.6804 million yuan, accounting for more than 20% of the revenue; the total income and proportion of intelligent mining ventilation business achieved rapid growth. 3) order level: the new order reached 258 million yuan in the first half of the year, which laid a good foundation for the follow-up business. 4) profitability: the company's comprehensive gross profit margin was 57.69%, an increase of 3.17pct over the same period last year; the sales / management / R & D expense rates were 6.13%, 8.22%, 15.44%, respectively, down 0.97/0.19/1.05pct from the same period last year, and the cost control ability was good.
Mine GIS is transformed to cloud service, AI enables intelligent mine construction based on cloud services, cloud and client integration and collaboration, through direct use of browser or App, "one map" model will support online collaboration in cloud environment, greatly improve the convenience of spatio-temporal data processing, realize cloud interconnection, collaborative sharing, and access anytime and anywhere. From the perspective of application requirements, mine GIS cloud model has strong practical needs. The mine cloud GIS platform provides high-quality information services to all types of users in the industry, especially small and medium-sized mining enterprises, in the way of "cloud rental", greatly reducing the initial investment in information projects, lowering the threshold for the use of information products, and improving the role of information technology in promoting the development of the industry.
With the breakthrough and application of AI technology represented by GPT and large model, more and more attention has been paid to the research and application of AI in intelligent mine construction. Through the AI large model platform, distributed spatial data engine, and the in-depth integration of mine business requirements with artificial intelligence and big data's technical architecture, it will be able to support larger scale and more kinds of data access and storage, and provide more data sources for mine big data analysis. With the support of AI technology, mine big data's analysis technology is more in-depth and more closely integrated with production safety business, providing relevant prediction models according to the characteristics of mine business, discovering professional laws beyond existing professional experience through machine learning, providing two-or three-dimensional, dynamic and static big data visualization effects, and providing a more practical and accurate real-time display and analysis application of big data in the GIS space-time scene.
Investment advice:
Long soft Technology, as the software leader of the coal industry, is boosted by the three major driving forces of frequent favorable policies and subsidies, the high prosperity of the coal industry and the urgent demand for intelligent transformation of customers, with its own product and technological advantages, it may open up growth space in the blue ocean market of intelligent mines and achieve rapid growth. It is estimated that the company's operating income from 2023 to 2025 will be 469 billion yuan, 635 million yuan, and the net profit of returning to its mother will be 1.16 percent, 154 million yuan, 210 million yuan, respectively. Maintain the buy-An investment rating with a six-month target price of 59.96 yuan, equivalent to 28 times dynamic price-to-earnings ratio in 2024.
Risk hints: the relevant industrial policies are not as expected; the product application promotion and industrial ecological construction are not as expected; the R & D of key core technologies of industrial software is not as expected.