Civil aviation air traffic control system is the domestic leader, and its performance is rising steadily: Rice information is based on the subsidiary of Electric Coles established by CLP 28, which takes the command information system for military and civil use as its core business. Rice Information is its civilian product platform company, which is mainly oriented to the information needs of civil aviation air traffic management, urban road traffic management, urban governance and other fields. In the first half of 2023, the company achieved revenue of 527 million yuan, an increase of 15.28 percent over the same period last year, of which civil aviation air traffic control business maintained rapid growth, with revenue of 232 million yuan, an increase of about 129 percent over the same period last year. Urban road traffic management business also achieved rapid growth, achieving revenue of 151 million yuan. With the improvement of the business structure, the company's gross profit margin increased by 2.03 percentage points year-on-year to 30.18%, and the net profit loss narrowed by 38.27% to 13 million yuan compared with the same period last year.
When the expansion of the civil aviation area control center is carried out, the air traffic control business is expected to meet the inflection point: "the 14th five-year Plan for Civil Aviation Development" proposes to set up a second regional control center in areas with saturated flight volume, complex airspace structure and prominent operational contradictions. The "84th N" layout system of the national large-scale regional control center will have a large incremental demand for the civil aviation air traffic control system. Combined with the continuous promotion of the localization process of the industry, the company as a domestic industry leader is expected to fully benefit. In May 2023, the construction of Wuhan Regional Control Center of Civil Aviation was started, which marked the official launch of the "84th N" system, and the inflection point of the industry is expected to come.
There is a strong demand for intelligence in small and medium-sized airports: the "Roadmap for Intelligent Civil Aviation Construction" issued by the Civil Aviation Administration at the beginning of 2022 is clear, which will focus on intelligent travel, intelligent air traffic control, intelligent airport, and intelligent supervision. In 2022, there are 206 small transport airports in China with a passenger throughput of less than 2 million passengers, accounting for more than 80% of the total number of domestic transport airports. Based on factors such as talent and environment, it has become an important means to meet the related needs of these airports through intelligent systems. The company works closely with airport users such as the Eastern Airport Group to build an overall solution benchmark for smart airports around Huaian Airport, and is expected to expand to other small and medium-sized airports in the future.
Investment suggestion: the follow-up new air traffic control center is expected to gradually land, the intelligent needs of local airports are also relatively clear, and the reduction of financial pressure in the future is expected to warm up the company's non-civil aviation business. We estimate that the operating income of the company from 2023 to 2025 is 18.69,22.22 and 2.644 billion yuan respectively, the net profit is 1.20,1.61 and 212 million yuan respectively, and the EPS is 0.73,0.98,1.30 yuan respectively. Cover for the first time, giving a "buy" rating.
Risk tips: the macro environment is not as expected, the market demand is not as expected, and the product research and development is not as expected.