Events:
The company said on the interactive platform that its cooperation with Huawei is mainly reflected in the purchase of Huawei Hayes chips for use in the NB series.
Comments:
Pioneers in the gas industry will join hands with Hayes to create smart gas end-to-end solutions. The company focuses on providing independent research and development of urban gas equipment and smart gas solutions, is the vanguard of China Gas metrology industry. In the 32 years since its establishment, the company has covered 30 + provinces, cities and regions across the country, providing quality and efficient services to more than 1200 gas companies and 25 million intelligent gas meters online users. The company's products include NB-IoT membrane gas meter, intelligent gas Flowmeter, membrane gas meter, gas Flowmeter and all kinds of safety products, among which NB series products can realize the functions of remote data reading, remote valve control, mobile recharge payment, fault detection and reporting, etc., through the NB-IoT authorized frequency band public network deeply covered by operators. The company's NB series products use Huawei Hayes NB-IoT Boudica series chips, which have a variety of technical highlights such as low power consumption, wide coverage and low cost, helping the company to provide customers with intelligent gas solutions.
We will continue to promote the transformation of smart cities, and smart gas meters will boost the company's performance. Under the background of "double carbon", the company actively promotes the development of smart gas in the digital era, and expands and deepens the layout in the field of smart gas. In the first half of this year, the number of confirmed sales terminals of the company's Internet of things products increased by 38% compared with the same period last year, and the confirmed sales revenue increased by 36% year-on-year, of which the number of smart meters sold on the Internet of things accounted for 96% of the total sales, ranking in the forefront of domestic smart gas meter enterprises. In the first half of the year, the company achieved revenue of 258 million yuan, an increase of 26.56% over the same period last year, and a net profit of 18.13 million yuan, an increase of 302.04% over the same period last year. Benefiting from the continuous optimization of the product structure, the gross profit margin of the Internet of things smart gas meter is higher than that of the IC card smart gas meter. The company's sales gross profit margin reached 35.42% in the first half of the year, an increase of 3.06pct over the same period last year, and a net profit rate of 7.62%, an increase of 5.11pct over the same period last year. With the continuous promotion of smart city transformation, governments at all levels will continue to strengthen the transformation and renewal of old pipelines, superimposing the historic development opportunities of "Belt and Road Initiative", and the company is expected to achieve sustained growth in performance.
Coverage for the first time, giving a "overweight" rating. We are optimistic that with the help of Hayes chip, the company will continue to promote the transformation of smart cities with high-performance products and achieve high performance growth. It is estimated that the revenue of the company from 2023 to 2025 is 953 million yuan, the net profit of return to the mother is 1.29 billion yuan, and the corresponding EPS is 0.57 yuan, 0.69 and 0.86 yuan respectively.
Risk hint: downstream demand is lower than expected, product promotion is not as expected, profit and valuation are not as expected.