A pioneer in smart coal mines and leading vertical racetracks, Mayanson focuses on construction in the field of coal mine informatization, serving coal mine operators and other enterprise customers. Its business covers intelligent safety monitoring, transmission communication networks, and intelligent geological security. In recent years, the country has intensively introduced policies related to smart mines to encourage the digitization and intelligent construction of mines. At the same time, compounding the rigid demand of downstream customers for production safety, the smart mining industry has ushered in a stage of rapid development. We are optimistic about Mayanson, who is deeply involved in this field. Its technical first-mover advantage and rich project experience have built up barriers to competition and are expected to benefit from the development of the industry. We expect the company's 2023-2025 EPS to be 0.23/0.33/0.44 yuan.

A leader in smart mining, having been deeply involved in coal for 20 years. Mayanson is a leading enterprise in coal mine informatization. With its core “Internet of Things +” technology, Mayanson empowers the digital construction of scenarios such as open-pit coal mines and metallic and non-metallic mines. Its core products include intelligent security monitoring, transmission communication networks, and intelligent address guarantee systems. The company's core business currently focuses on smart mines, and has also expanded to a certain extent in environmental protection and urban management, with the goal of becoming an overall IoT solution provider and operation and maintenance service provider. In recent years, the company's revenue and profit have grown rapidly. In 2020/2021/2022 and the first three quarters of 2023, the company's revenue reached 2.85/3.09/3.76/296 million yuan, a year-on-year increase of 5.2%/8.4%/21.7%/25.78%; net profit reached 26.07 million/28.63 million/36.99 million/35.48 million yuan, a year-on-year increase of 14.7%/9.8%/29.2%/46.6%.

Policies promote smart mines, and industry development ushered in opportunities. The characteristics of China's energy are “rich in coal, lack of oil, and lack of gas.” This determines that China's energy consumption structure is dominated by coal. According to data from the National Bureau of Statistics, China's total coal production will reach 4.56 billion tons and total consumption will reach 5.41 billion tons in 2022. Coal production and consumption are on the rise. The country is vigorously promoting smart mines. The “Guiding Opinions on the High-Quality Development of the Coal Industry in the 14th Five-Year Plan” issued by the China Coal Industry Association mentions that by the end of the “14th Five-Year Plan”, the country's coal quantity will be limited to less than 4,000, and large-scale coal mine production will account for more than 85%; more than 1,000 intelligent mining sites have been built; and the degree of mechanization of coal mining machines in coal mines is about 90%. We believe that industrial policy support is remarkable, and the goals are clear and clear. According to the policy requirements for coal mine transformation, the value of single mine transformation, and the proportion of software and hardware system value, we expect that the space for software and hardware equipment transformation in China's coal mines may reach 10 billion dollars in the next three years. The smart mine circuit is expected to accelerate growth and usher in opportunities for development.

The company deepens its core layout and actively expands business outreach. With coal mine informatization as the cornerstone, Mayanson has continuously carried out technological exploration and commercialization practices, and established a broad ecological cooperation network through endogenous epitaxial extension. According to the company announcement: 1) The company promoted technology localization, completed the localization adaptation certification for the Xiaoan Yilian Industrial Internet Operating System, and completed adaptation and optimization for domestic CPUs such as Kunpeng, Feiteng, Longxin, and Hisilicon Kirin.

2) The company has established extensive partnerships, carried out strategic cooperation with Huawei, joined the Huawei Solution Partner Program as an ISV independent software supplier; and jointly launched an overall solution for intelligent coal mine data systems with Alibaba Cloud Computing Co., Ltd. 3) With the satellite Internet layout, the subsidiary Chongqing Zhihexing IoT Technology Co., Ltd. can carry out “domestic very small aperture terminal earth station communication services,” “content distribution network services,” and “Internet access service services” nationwide. The company has built up barriers to competition through technology research and development, project implementation, and ecological cooperation.

Risk factors: risk of lower revenue due to lower capital expenses of downstream customers than expected; risk of declining gross margin due to increased market competition; risk of smart mining development falling short of expectations; risk of technological innovation falling short of expectations; risk of company project construction progress falling short of expectations; risk of bad company accounts receivable; risk of bad company receivables; risk of policy introduction and progress falling short of expectations; risk of expanding new fields such as satellite Internet falling short of expectations, etc.

Profit forecasting, valuation and ratings: We believe that benefiting from the vigorous promotion of national policies and demand from downstream customers, the mining informatization circuit will enter a stage of rapid development. As a pioneer in the field of coal mine informatization, Mayanson is expected to continue to benefit from the development of the industry. We expect the company's 2023/2024/2025 EPS to be 0.23/0.33/0.43 yuan, and the current stock price corresponding to PE is 57/40/30 times. There is great uncertainty about the company's investment layout. It is recommended to pay attention to the significant impact of developments in new fields such as satellite Internet on the company's business situation.