Hualong Xunda's latest autonomous and controllable medium and large PLC is equipped with Longxin chips. Longxin helps the development of domestic high-end industrial control systems. On December 27, 2023, the Federation of Trade Unions, Hualong Xinda and Longxin Zhongke jointly released the JLC PLC 8010, a high-end autonomous PLC controller equipped with a Longxin 3A5000 processor.

The controller can be connected to 65,535 I/O points, and the 2ms task cycle can drive 512 servos. The operating time jitter is less than 20 microseconds. The performance is comparable to similar imported products. It can be used in domestic equipment, new energy production lines, military manufacturing, wind power, electronics, rail transit and other industries and fields. The medium and large PLC process is complicated, and users have high requirements for product safety and anti-interference. China's medium and large PLC market is still monopolized by foreign investors. According to Huajing Industry Research Institute, the localization rate of China's medium and large PLC market in the first quarter of 2023 was 5.5%. Through in-depth cooperation with domestic industrial control manufacturers, Longxin Zhongke provides a computing power base for domestic medium and large PLCs, fills gaps in China's independent high-end PLC equipment and applications, and enhances the competitiveness of China's industrial control industry.

Continue to improve ecological construction, reduce development difficulties, enhance user experience, and promote ecological prosperity. In November 2023, a total of 101 compatible products from 75 companies were added to the Longxin desktop and server platforms, covering various fields such as digital governance, security protection, and smart teaching. The increase in the number of adaptive software is conducive to improving user satisfaction and promoting the promotion and application of Dragon Core processors in the market.

In December 2023, the new boot program GRUB 2.12 officially supports the Dragon architecture. The compatibility of mainstream guidance programs with the Dragon architecture enhances the usability and portability of Dragon Core processors, reduces development costs for middle and downstream manufacturers in the industrial chain, enhances the competitiveness of Longchip products, and ultimately promotes the upstream and downstream development and prosperity of the Longchip ecosystem and its industrial chain.

The business of credit innovation continues to advance, and key breakthroughs have been made in the education industry. Longxin Zhongke continues to strategically lay out the Xinchuang industry, deeply cultivate relevant advantageous fields such as party and government, and continue to expand the industry's credit innovation. In the financial industry, in October 2023, the company received the most innovative value award for the industry's credit innovation project of the year. In the field of education, Longxin Zhongke and Kevin Education Group signed a strategic cooperation agreement on October 31, 2023; on November 28 of the same year, they reached a strategic cooperation agreement with Openg Education; in January 2024, Longxin Zhongke signed cooperation agreements with Zibo Vocational College, Shandong Vocational Electronic Technology College, Qingdao Vocational College of Engineering, etc., to strengthen the integration of industry and education, deepen school-enterprise cooperation, cultivate innovative, applied, and complex talents, and add vitality to the independent field of information technology innovation. Longxin focuses on the party government and related industries, while focusing on the education sector, and continues to expand and deepen its Xinchuang business.

Profit forecast: Revenue for 2023-2025 was $7.09/10.85/1.65 billion, up -4.0%/53.0%/52.1% year-on-year, and net profit to mother was -2.02/0.21/288 billion yuan respectively, maintaining the “buy” rating.

Risk warning: Business development falls short of expectations, and industry competition intensifies.