Urban renewal policy support + science and technology empowerment + offline travel visit demand rebounded, the exhibition industry has broad prospects. In terms of policy, the implementation scope of urban renewal is further expanded in the development plan of the 14th five-year Plan, and the renewal and upgrading of urban public space has become the focus of urban renewal and development. With the enrichment of urban renewal and transformation, the proportion of renovation projects for public space will increase day by day. In terms of technology, meta-universe, AIGC technology and exhibition are combined to enrich the product ecology and business model of the theme exhibition hall. On the demand side, the cultural consumption demand of residents is increasing day by day. According to Trip.com, the number of ticket bookings for summer museums ranked first in all kinds of scenic spots, and the orders for other cultural landscapes also increased significantly compared with the same period last year. Considering that the per capita number of museums in China is far lower than the world average, there is sufficient potential for the construction of cultural venues represented by museums.
Leading project management ability, actively expand urban renewal business customers. The company adopts the business model of integrated contracting for individual project construction orders, and has the ability to undertake large-scale orders. according to the company's financial report, the amount of orders for projects such as the Yellow River Culture Exhibition and Chen Project, which won the bid in 23 years, is more than 100 million yuan. The company actively grasps the renewal demand of pavilion construction brought about by urban renewal and offline economic recovery, and the newly signed order amount from January to August 2023 is 1.211 billion yuan, showing a significant warming trend.
Deep accumulation of digital display technology, actively explore the application of cutting-edge science and technology in the exhibition scene. The company took the lead in laying out urban meta-cosmic applications such as virtual pavilions, virtual buildings and virtual spaces, thanks to increased demand for new technology projects. Fengyuzhou, a subsidiary specializing in emerging technology applications, has a rapid growth in science and technology performance, with a net profit of 18.43 million yuan in the first half of 2023, higher than the net profit of 13.55 million yuan in 2022. With the deepening of the company's layout in the field of emerging technology, it is expected to develop the diversified application of "AIGC+MR" in exhibition, cultural and entertainment, commercial consumption and other industries, and cultivate a second income growth curve.
Profit forecast and investment advice: the support of offline economic repair and urban renewal strategy will lead to the recovery of industry demand, and the company is expected to increase its market share by virtue of its excellent creative strength and project management ability. it is estimated that the annual return net profit in 23-24-25 will be 3.14x425pm 556 million yuan, compared with the same period last year, + 376% picks "35% picks" 31%, giving the company 20 times PE in 24 years, with a target price of 14.29yuan, covering for the first time. Give a "buy" rating.
Risk tips: macroeconomic fluctuations, market competition intensified, technological development is not as expected.