Overview of events:
On August 31, Shengshi Technology released the 2023 half-yearly report. In the first half of the year, the company's operating income was 804 million yuan, an increase of 36.52% over the same period last year; the net profit of returning to the mother was 126 million yuan, an increase of 58.98% over the same period last year; and the net profit of non-return was 108 million yuan, an increase of 61.30% over the same period last year.
Q2 achieved a high increase in net profit, the port fully recovered to meet the peak demand 2023H1 operating income 804 million yuan (year-on-year + 36.52%), home net profit 126 million yuan (year-on-year + 58.98%), excluding asset impairment, realized home net profit reached 206 million yuan (year-on-year + 72%); Q2 alone, the company's operating income is 388 million yuan (year-on-year + 18.21%), home net profit is 56.1217 million yuan (year-on-year + 94.1%). From a business point of view, the revenue from the solution of the main business intelligent port inspection system is 709 million yuan (+ 42.57% compared with the same period last year), accounting for 88.11% of the business income. China's port customs clearance ushered in a full recovery, project acceptance and revenue recognition gradually returned to the normal pace, smart port business income increased rapidly, intelligent transportation and other business income was 91.8332 million yuan (year-on-year + 0.56%).
Since the beginning of this year, the relevant state departments have gradually liberalized the entry and exit policy and optimized the measures for the management of entry personnel and goods. In addition, in April, the State Port Management Office issued a notice to meet the needs of port development, focusing on five major construction tasks: upgrading intelligent facilities and equipment, building intensive information systems, improving digital operation and management, providing comprehensive services for facilitation, and carrying out regular cross-border cooperation. The first half year The company successfully won the bid for the informationization upgrading project of Nanxihe Joint Inspection Building of Hekou Port, the wisdom transformation and upgrading project of Ruili (including Kancho) Port (Phase I), the passenger inspection facility project of Haikou South Port, Wuliji Port (Phase I) construction project, Hangzhou Xiaoshan International Airport Phase III Project New Terminal and Land side Traffic Center Project Joint Inspection Unit Special system Supplementary Project, Horgos national logistics hub integrated information service platform construction project and so on. With the full opening of the port and the sharp rebound of the flow of people and goods, as well as the in-depth construction of the smart port, the company's industry is back on the right track, creating favorable conditions for the company's business.
The advantage of the overall solution is remarkable. The company that vigorously expands the business of the special supervision area is a company with a successful solution of the intelligent port inspection system in the industry, and has a strong comprehensive competitiveness in this field. the products cover from the front-end equipment to the back-end system, which can quickly respond to the diversified needs of customers, while undertaking the construction and background maintenance of joint inspection units such as frontier inspection and customs (including original inspection and quarantine). It can realize the network management and risk analysis of personnel, luggage, means of transportation and goods, which greatly improves the efficiency of customs clearance.
In addition, the customs special supervision area, as the extension field of the port, is the key market of the company in recent years. Relying on the advantages of the customs industry, the company has set up the Wisdom clearance Department and launched a new generation of comprehensive insurance zone wisdom solutions. last year, the company successfully won the bid for Xiongan Free Trade Zone (Comprehensive Free Trade Zone) and other projects. and closely follow the market demand for customs closure operation of Hainan Free Trade Port. We believe that by vigorously expanding the business of special supervision areas such as comprehensive bonded areas, bonded areas and cross-border industrial zones, and serving the customs supervision market of international trade, the company is expected to open up new business growth points.
Overseas markets continue to increase, promoting "AI+ Industry" landing application companies to actively participate in digital society construction projects along "Belt and Road Initiative", tapping sea business opportunities to create conditions. The company has carried out related business in the United Arab Emirates, Saudi Arabia, Nigeria, C ô te d'Ivoire, Kenya, Senegal, Ethiopia, Egypt, Indonesia, Cambodia, Thailand and other countries. It has set up wholly-owned subsidiaries in Nigeria and Cambodia, set up offices in C ô te d'Ivoire and Senegal, and is promoting the establishment of wholly-owned subsidiaries in the United Arab Emirates and Saudi Arabia. Continue to promote project delivery related work, Saudi NEOM, the United Arab Emirates port, Cambodia airport project delivery is nearing completion, and won praise from customers.
Based on the "Volcano" project created by AIGC technology, the company's New Technology Research Institute has realized the application of AI algorithm technology of "small sample, large model". Driven by this technology, the company's face recognition algorithm ranks among the best in the global authoritative test, and the related technology of face recognition has also been fully verified in the customs face big data analysis and the biological information collection of border inspection. In addition, the company's ChatGPT-like applications incubated by multi-modal large model technology have been verified in domestic border inspection, customs and other scenarios, and the company has newly created and promoted a variety of AI+ integration of smart port 2.0 innovation model to help global customers to create a port economy with regional characteristics.
Investment suggestion
As the forerunner and leader of domestic intelligent port, Shengshi Technology has many years of port information construction experience, overall solution advantages and perfect ecological layout of AI+ products. We believe that under the catalysis of the recovery of entry and exit demand after the epidemic and the accelerated construction of Hainan customs control points, the company will usher in rapid growth. It is estimated that the operating income of the company from 2023 to 2025 is 2.631 billion yuan, respectively, and the net profit is 2.92 billion yuan, respectively.
Maintain a buy-An investment rating with a six-month target price of 39.88 yuan, equivalent to a dynamic price-to-earnings ratio of 35 times in 2023.
Risk Tips:
Product and technology R & D risk; overseas business development is not as expected; immigration policy relaxation is not as expected; impairment risk is calculated for receivables.