Key points of investment

With bank IT as the core, there is collaborative development in various fields of air traffic control, government and enterprise.

The company's revenue continued to grow. In 2012-2022, revenue increased from 380 million yuan to 1.45 billion yuan, with a CAGR of 14.5%. The banking IT business is the core of the company, accounting for 44.0% of the company's revenue in 2022. Financial Credit Innovation is booming. The company is shortlisted for the China CITIC Bank procurement project in 2023 and is expected to bring in about 1.47 billion orders. Based on the company's customer base in banking IT, future performance is guaranteed.

Low-altitude economy takes the lead in air traffic control. The company has been deeply involved in military air traffic control informatization for many years. Currently, it is laying out low-altitude surveillance and low-altitude air control to open up the blue ocean market.

The scale of China's low-altitude economy has exceeded 500 billion yuan in 2023, and is expected to reach 2 trillion yuan by 2030. The corresponding CAGR is 21.9%. Since the concept of “low-altitude economy” was first incorporated into the national plan in 2021, the central government and local authorities have attached great importance to the development of the low-altitude economy. In March 2024, the low-altitude economy was first written into the “Report on the Work of the Government”. The management of low-altitude airspace is organized and carried out in a unified manner by the Air Force under the leadership of the National Air Traffic Control Commission. The company has many years of experience in the field of military aviation management, has provided information technology services for the military, and has many important military qualifications. With an exchange platform as the core, the company has established a systematic air traffic control data service guarantee capability. In the future, monitoring and supervision of low-altitude airspace will require the integration of various technical means, and the company is expected to help build low-altitude air control informatization through data exchange capabilities.

Profit forecasting and valuation

We expect total revenue of the company to be 15.17, 18.04, and 2,050 billion yuan in 2023-2025, with growth rates of 4.3%, 18.9%, and 13.6%; net profit to mother of 0.65, 0.83, and 104 million yuan, with growth rates of 24.0%, 28.0%, and 25.6%. With Rice Information, Sichuan Jiuzhou, and Runhe Software as comparable companies, we gave the company 51 times PE in 2024. Covered for the first time, a “gain” rating was given.

Risk warning

Policy uncertainty risk; market competition risk; project execution risk; risk of demand falling short of expectations