The fee control effect was remarkable, and net profit due to continued steady development increased 27%. In 2023, the company achieved 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 26.66% over the previous year. Among them, the smart transportation electronic billing business achieved revenue of 374 million yuan, an increase of 24.23% year on year; the operation management system business was 344 million yuan, up 22.29% year on year, and the derivative business of 22.825,500 yuan increased 61.37% year on year. The gross margin of the operation management system business declined by 5.43 pct due to short-term fluctuations. The company's overall gross margin fell slightly by 1.46pct., to 46.96%. In terms of cost rates, the cost control effect was remarkable. The sales expense ratio, management expense ratio, and R&D expense ratio decreased by 1.58, 1.63, and 0.88 pct, respectively. , the overall net margin increased by 0.5 pct.
The only authorized ETC issuer in Jiangsu Province. New ETC users in 2023 accounted for 10.17% of the total distribution volume in the country, ranking among the top three in the country for cumulative total users. Tongbao is the only authorized ETC distribution agency in Jiangsu Province. It has established a complete online distribution channel, and the user coverage area has spread across 30 provinces and cities across the country. In 2023, the company developed a total of 2,067,900 ETC users, accounting for 10.17% of the number distributed in the country; it has developed a total of about 24 million ETC users, ranking in the top three in the country; with “ETC+” as the core, it has built a comprehensive smart transportation ecosystem in vertical fields such as ETC+ highways, parking, refueling, supply chain services, and road area economy. In 2023, the company's ETC distribution business achieved a year-on-year increase of 28.53% in revenue of 223 million yuan.
The derivative business uses “ETC+” to develop ecological scenarios, and cooperate with financial institutions such as insurance to provide value-added services and customer drainage services. Relying on the number of ETC users and data volume advantages, “ETC+” is used as the core to build ecological scenarios, focusing on vertical business areas such as high-speed traffic, parking, refueling, road area economy, and vehicle maintenance, to provide users, financial institutions, and other partners with value-added services, customer drainage, supply chain collaboration services, and risk management and control services.
Shareholders' backgrounds are remarkable. They use provincial scenarios to incubate innovative projects and cooperate closely with leading banks and insurances to expand the depth of the “transport+” field. The largest shareholder of the company is Jiangsu Communications Holdings Co., Ltd., which holds 49.35% of the shares. The company makes full use of the advantages of state-owned enterprises, as well as the resources, scenarios, and business advantages of the internal road network in Jiangsu Province to promote the incubation and transformation of scientific and technological innovation achievements in the internal market and export them to the national market. At the same time, it has established good and close cooperative relationships with more than 10 financial institutions, including “Construction of Workers and Farmers”, to further promote the integrated development of consumption scenarios and financial services, and enhance the depth and breadth of the company's services in the “transport+” field.
Profit forecast: We forecast the company's revenue for 2024-2026 to be 9.86, 13.76, and 1,804 billion yuan, respectively, up 32.92%, 39.63%, and 31.03%; net profit to mother was 2.63, 3.97, and 535 million yuan, respectively, up 37.87%, 50.86%, and 34.68% year-on-year, with earnings per share of 0.65, 0.98, and 1.31, respectively. The first coverage gave a “buy” rating.
Risk warning: ETC promotion progress falls short of expectations, profit forecasts and valuation models have been revised downgraded.