Summary of events: on October 25, 2023, the company released the third quarterly report of 2023, with operating income of 1.271 billion yuan in the first three quarters of 2023, an increase of 26.48% over the same period last year, and net profit of 135 million yuan, an increase of 117.67% over the same period last year.
In the third quarter, new orders signed by Xinchuang increased by 60% compared with the same period last year. At the same time of the rapid development of Xinchuang's business, the company has further expanded the business development of the second growth curve: 1) Meteorological business: the company has made further efforts in disaster prevention and relief and the application of "Meteorological +" industry. in the third quarter, newly signed orders increased by 68% compared with the same period last year. Carry out natural disaster risk monitoring, risk assessment, disaster risk management and disaster risk data services for the National Climate Center and customers in Guangxi, Shaanxi, Shandong, Qinghai, Hebei and Hunan provinces.
2) Water conservancy business: the newly signed (winning bid) order increased by 200% compared with the same period last year. The newly signed orders mainly focus on water conservancy digital Li Sheng, irrigation district digitization, high-standard farmland construction, urban flood control, improvement and transformation of water management, flood forecasting, water regime and water quality monitoring, hydrological business system, and so on. 3) Enterprise business: in the first three quarters, the newly signed orders of enterprise business (including map business) increased by 80% compared with the same period last year. At the same time, the research and development of enterprise application products was strengthened, and the low-code digital Li Sheng platform was developed to serve the digital transformation of enterprises. 4) big data business: the company further strengthened data governance wide product research and development, and data governance business orders increased significantly in the first three quarters compared with the same period last year. It mainly focuses on the governance and fusion business of spatial data and the governance of special data such as marine data governance and leasing data governance.
In-depth cooperation with Huawei in important subdivisions. The company's GIS basic software fully supports Kunpeng, openGuass, Euler, Hongmeng, Yiteng and other ecological and AI technologies. In terms of database, the company and Huawei jointly released Yugong open source spatial database, which provides spatial data storage, calculation and management capabilities, and enables the existing GIS business.
Deepen technology integration and promote AI to enable existing services. The Future GIS Lab of Supermap Research Institute has had an insight into the prospect of generative AI (AIGC) and large models in mid-2022, and laid out the research ahead of time.
The product SuperMap GIS 2023 released in June this year has integrated the SAM visual model; aiming at the NLP model, it is introduced into the vertical field of the industry to provide privatization deployment. Aiming at the multi-modal large model, starting with AI painting and laying out the field of AIGC, an integrated application project of adaptive planning business is developed, such as comparative map and planning concept map before and after rural reconstruction. SuperMap GIS 2023 closely follows the frontier of AI, integrates pre-training models represented by Transformer technology, and provides a variety of pre-training models for remote sensing image interpretation.
Investment advice: the company is the world's leading GIS industry leader, based on the basic market to create a second growth curve, to digital twin water conservancy, meteorology, airport and other directions to expand, and seize the opportunities such as Xinchuang, real 3D China, sufficient growth momentum; at the same time, in-depth layout of forward-looking opportunities, in AI, data elements and other areas to open up long-term growth space. It is estimated that the company's net profit from 2023 to 2025 will be RMB 2700, 389, 518 million, corresponding to the PE of 36X, 25X and 19X respectively, maintaining the "recommended" rating.
Risk tips: the promotion of new technology is not as expected; the rhythm of industry demand release fluctuates; industry competition intensifies.