Maintain the target price of 27.18 yuan and maintain the “Overweight” rating. Considering the decline in gross margin of the management system business, the 2024 and 2025 profit forecasts were lowered based on the company's annual report data, and the 2026 profit forecast was added. The 2024-2026 EPS was 0.60 (-0.12), 0.74 (-0.20), and 0.91 yuan, respectively. The target price was maintained at 27.18 yuan, maintaining the “gain” rating.
Revenue growth was in line with expectations, and profit growth was slightly lower than expected. In 2023, the company achieved total revenue of 742 million yuan, a year-on-year increase of 24.19%, and achieved net profit of 191 million yuan to mother, an increase of 26.54% over the previous year. In terms of revenue, the growth rate of the ETC issuance business in Q4 was slightly lower than expected, mainly due to a decline in the average ETC issuance price. However, the growth rate of the operation management system business accelerated in the second half of the year, so the overall revenue growth rate was in line with expectations. In terms of profit, the profit growth rate was slightly lower than our expectations due to the decline in gross margin of the operation management system business and changes in the business structure.
The billing business volume recovered as scheduled and became the company's solid performance base. The company's various business volumes recovered steadily during the reporting period. ETC circulation exceeds 2 million, and has recovered to the highest level except in 2019, with a national market share of over 10%. Clearance tolls increased 23.76% year over year, completely eliminating the interference of external environmental influences. ETC charges will continue to contribute stable cash flow to the company.
Focus on ETC2.0's promotion of the company's performance. Currently, ETC has become the most important toll model for highways in China after being driven by the 2019 policy, and is moving towards the ETC 2.0 era.
ETC2.0 incorporates some V2X functions to greatly upgrade traffic speed and functionality. It is expected that while ETC2.0 will bring a new wave of OBU updates, it will also greatly increase the unit price, and may be a flashpoint for the company's ETC distribution business in the future.
Risk warning: Data element policy progress falls short of expectations; policy risk; business outside the province is blocked.