Anhui Province is a leader in the design of state-owned enterprises with complete qualifications and abundant orders. The company is the leading enterprise in the transportation design industry in Anhui Province. it was founded in 1994, completed the transformation of the company system and shareholding system in 2011 and 2014 respectively, and landed on the main board of the Shanghai Stock Exchange in August 2017. the largest shareholder, Anhui Traffic Control Group (47.28%). The company has entered the top 50 national design enterprises for many years, and its business qualification is "two ensembles and one first class". It covers the field of transportation and provides integrated technical solutions for infrastructure construction and operation and maintenance. From 2014 to 2022, the company's operating income increased from 744 million yuan to 2.798 billion yuan, with a compound growth rate of 18.01%. The net profit returned to its mother also increased from 125 million yuan to 443 million yuan, with a compound growth rate of 17.14%. As of 23H1, the amount of orders-on-hand is 8.238 billion yuan, and the amount of orders-on-hand is 294% of the 2022 income of Prida, leading the industry.

The highway mileage of the 14th five-year Plan is to be increased by 300000 kilometers, and there is plenty of room for intelligent transportation market.

During the 14th five-year Plan period, China will add 302000 km of highways, 2400 km of inland waterways, more than 270 civil transport airports and about 10000 km of urban rail transit. The amount of infrastructure investment in Anhui Province exceeded 500 billion yuan during the 14th five-year Plan period and about 110 billion yuan in 2023. China's intelligent transportation market is in the early stage of development. according to the prospective Industrial Research Institute, from 2018 to 2020, China's intelligent transportation market grew at an average annual rate of 35.86%, reaching 1452 yuan, 1919 yuan and 228.7 billion yuan respectively. Looking to the future, China's intelligent transportation market will maintain rapid growth from 2021 to 2027, and the market size is expected to reach 640 billion yuan in 2027, with a compound growth rate of 9.86%.

New business development has improved significantly, and digital intelligence has achieved remarkable results. Engineering rehabilitation: according to the data of the Ministry of Communications, the total mileage of highways throughout the country reached 5.198 million kilometers during the 13th five-year Plan period, with an increasing investment in daily maintenance of 258.7 billion yuan and maintenance projects of 789.8 billion yuan. The company's engineering rehabilitation business 23H1 signed an order of 99.56 million yuan, achieving an income of 11.16 million yuan in 2021 and exceeding 62.28 million yuan in 2022, a year-on-year increase of + 458%. The newly signed intelligent business contract reached 24.47 million yuan in 2022. The company has completed the first and second phases of the construction of the cloud platform, and started the third phase of construction, initially realizing the full professional coverage of the knowledge base and collaborative business system, and basically realizing the cloud-based survey business. it has the characteristics of flexibility, accuracy and personalization. Excellent management and high efficiency: the per capita output value reached 1.2985 million yuan in 2022, far exceeding the competitors, thanks to the company's talent strategy, management optimization and incentive mechanism.

Profit forecast. We estimate that from 2023 to 2025, the company's revenue will be 3.761 million yuan, an increase of 16.5 percent, 14.8 percent, 13.0 percent, and a year-on-year growth rate of 14.6 percent, 14.8 percent, 13.0 percent, and 647 million yuan, respectively. The year-on-year growth rate is 14.2 percent, 14.6 percent, 11.6 percent, 1.03 and 1.15 yuan, corresponding to the closing price of 9.49 yuan on August 25, 10.53/9.19/8.23xPE. For the first time, coverage gives a "buy" rating.

Risk hint

Demand is lower than expected, infrastructure investment is not as expected, market expansion of software products is not as expected, and systemic risk.