Matters:

Lanjian Intelligence announced on January 11, 2024. Recently, it received the “Notice Concerning the Establishment of the “14th Five-Year Plan” National Key Research and Development Program “Cultural Technology and Modern Service Industry” by the High-tech Research and Development Center of the Ministry of Science and Technology and the “Notice on the 2023 Project Establishment of the National Key R&D Program “Intelligent Robot” Key Project” by the Industrial and Information Technology Industry Development Promotion Center. The “Digital Intelligent Logistics Service Technology and Platform R&D and Demonstration Application for E-commerce” project with the company as the project lead unit The “Dynamic Scheduling and Optimization of Autonomous Mobile Robot Cluster System” project, which is the lead undertaker of the project, was approved and approved.

Commentary:

Digital intelligent logistics and autonomous mobile robot system projects have been approved and set up, and software and hardware capabilities have been demonstrated. The development and demonstration application of digital intelligent logistics service technology and platform for e-commerce is led by Lan Jian Intelligence, with the participation of many universities, Shanghai Pharmaceutical Logistics Center, Yanjin Store, and Time Angel, with the goal of improving digital intelligent logistics service capabilities for pharmaceuticals and food e-commerce, with “ecosystem construction, fast and accurate data control, intelligent equipment manufacturing, and platform service optimization” as the core content to study the three types of technology and system equipment for accurate positioning and search, intelligent monitoring, autonomous obstacle avoidance and route optimization. The dynamic scheduling and optimization project for autonomous mobile robot cluster systems is led by Lan Jian Intelligence, with the participation of many universities, mechanical development, SAIT Intelligence, Guangzhou Medical University Second Hospital and Kuaicang Intelligence. It is guided by the actual needs of typical applications such as pharmaceutical distribution, e-commerce retail, footwear, and intelligent manufacturing to overcome high-precision positioning and navigation of large-scale mobile robots and accurate panoramic space perception in complex dynamic environments, real-time generation of robot cluster task scheduling solutions under dynamic multi-target constraints, dynamic task dynamic allocation under large-scale cluster operations, and efficient collaborative control of multiple robots, etc. Mobile robot clusters are dynamically scheduled and optimized systems, and applied technology solutions are formed.

Advances in logistics automation technology have broadened application scenarios, and the company's high self-development and production rate of software and hardware has laid the foundation for long-term development. China's overall logistics operation efficiency is at a low level compared to developed countries, and the cost reduction and efficiency of intelligent logistics systems is in line with the development trend of downstream industries. At the same time, the planning and design concepts of logistics systems are constantly changing, and software and hardware equipment technology continues to advance, and it is expected to accelerate penetration in more industries and broaden application scenarios in the future. The company has independent research and development capabilities for digital twin platforms for software products and logistics robots. The product self-development rate exceeds 80%. 2023H1 continues to increase research and development of intelligent robot products for different downstream industries, and thoroughly applies technologies such as big data, the Internet of Things, artificial intelligence, and 3D vision algorithms, and continues to improve the digital twin platform. The two national projects approved by the company this time also reflect the company's advantages in the field of logistics system software and hardware. In the future, it is expected to help the company improve its digital logistics service capabilities in the pharmaceutical and food e-commerce field and further strengthen the company's technology research and development in the field of intelligent robots.

Investment advice: The company has strong independent technical capabilities in software and hardware, remarkable results in expanding the downstream industry, sufficient orders in hand, and continuous increase in production capacity. We expect the company to achieve revenue of 1.30 billion yuan, 1.80 billion yuan and 2.38 billion yuan in 2023-2025, and realized net profit of 1.45, 2.07, and 286 million yuan respectively, and corresponding EPS of 1.98, 2.84, and 3.92 yuan respectively. Based on the similarity and correlation with the company's business, we selected Today International (similar warehousing and logistics solution business), Dongjie Intelligence (similar warehousing logistics solution business), and Yijiahe (intelligent inspection robot business similar to Lan Jian intelligent logistics robot) as comparable companies. Referring to the valuation level of comparable companies, we gave them 16 times PE in 2024, with a target price of 45.77 yuan, maintaining a “strong” rating.

Risk warning. The decline in manufacturing sentiment has led to a decline in downstream capital expenditure; technology has been overtaken or replaced; profitability has declined due to fierce competition in the industry, etc.