The leading civil aviation management company, backed by China Telecom 28. Rice Information was founded in 1988 as an overall solution provider for civilian command information systems, mainly providing overall command information system solutions and series products with command and control technology as the core. As the actual controller, China Telecom holds 60.32% of the shares. As the controlling shareholder, the company was first established on the basis of China Telecom 28, which has long been committed to technological innovation in civil aviation management, creating various product lines such as air traffic control automation, simulation training, scene management, traffic management, and air traffic control equipment, forming a product line covering door-to-door air traffic control services.
Based on the air traffic control business, we will continue to lay out internationalization and airport informatization. (1) In the field of air traffic control, the “8+N” system of large-scale regional control centers across the country continues to advance, which is beneficial to the industry and brings considerable market space. The company mainly focuses on management command, control and command (ATC) systems and traffic management (ATFM) systems in civil aviation traffic management systems (ATMs). According to Sansheng Consulting statistics, as of December 2022, the company's system coverage rate of the national air traffic control system reached 80%, and the market share was 42% (the main system accounts for 63.64%), leading the country. (2) In the field of airport informatization, the company developed key systems for localized smart airports, built the Huai'an Airport project, and successfully built an efficient and intelligent information integration system (IIS), focusing on setting a new benchmark for small and medium-sized smart airports. (3) In the field of internationalization, the company entered the international market for the first time in the 2015 air traffic control system for a project in Angola. Since then, the company has successively won bids for major international projects in Indonesia, Kenya, Iraq, Cambodia, etc.
Based on the advantages of air control business, we aim to become the main force in building a low-altitude economy. The concept of a “low-altitude economy” was first incorporated into the national plan in 2021. The 2023 Central Economic Work Conference pointed out that to build a number of strategic emerging industries, such as biomantry, commercial aerospace, and the low-altitude economy, the 2024 low-altitude economy was included in the government work report for the first time. As a leader in the field of air traffic control systems, the company has a forward-looking layout in the field of low-altitude economic infrastructure construction, and collaborated with 28 institutes to develop general aviation products such as low-altitude flight service solutions and low-altitude navigation service systems. Major engineering projects in the low-altitude field were bid in 2022. The project provides owners with a complete simulation and verification platform for low-altitude flight services. The aim is to provide platform support for future national low-altitude operation concepts, key technology research, and policy research. In January 2024, it won the bid for the Anhui Low-Altitude Flight Service Platform Project, which basically realized the construction of a provincial low-altitude flight service guarantee overall solution system.
Profit forecast and investment rating: The company is a leading enterprise in the field of air traffic control systems in China, and is expected to fully benefit from the development of the low-altitude economy industry. We expect revenue for 2023-2025 to be 16.75/20.11/2,422 billion yuan, with year-on-year growth rates of 6%, 20%, and respectively; net profit to mother of 1.31/1.64/209 million yuan, respectively, with year-on-year growth rates of 47%, 25%, and 28%, respectively, corresponding PE of 45/36/28 times, respectively. First coverage, giving a “buy” rating.
Risk warning: Policy progress falls short of expectations; technological progress falls short of expectations; competition intensifies the impact.