Rapid growth in performance, equity incentives highlight the company's operating confidence
The company released its 2023 annual report. In 2023, it achieved revenue of 742 million yuan (YoY + 24.19%), net profit to mother of 191 million yuan (YoY +26.66%), deducted non-net profit of 181 million yuan (YoY +29.71%), 2023Q4 revenue of 290 million yuan (YoY +23.23%), net profit to mother of 36 million yuan (YoY -18.90%), and net profit of 35 million yuan (YoY -18.03%). After deducting pay-on-delivery tolls in 2023, the company's operating cash flow was 210 million yuan, a significant improvement over the previous year (117 million yuan), mainly due to the increase in cash received from selling goods and providing services in 2023 compared to the same period last year. At the same time, the company also issued a draft equity incentive. The revenue assessment target for 2024/2025/2026 is no less than 13.5%/14.5%/15.4%, respectively, and not lower than the industry average or the 75th quartile value of the target company, demonstrating the company's confidence in steady operation.
ETC accelerates expansion, and the electronic billing business is rapidly picking up
In 2023, the company's smart transportation electronic billing business revenue was 375 million yuan (+24.23%), accounting for 50.57% of revenue: (1) The expansion of ETC distribution business users accelerated, with revenue of 223 million yuan (+28.53% year over year). In 2023, the company developed 2,067,900 ETC users (1.28 million in 2022), accounting for 10.17% of the number distributed nationwide (9.3% in 2022), and has accumulated ETC user contracts There are 24 million users, and the coverage area has spread across 30 provinces and cities across the country. (2) Economic recovery led to a rapid recovery in the electronic toll service, which achieved revenue of 152 million yuan in 2023 (+18.43% year over year). The cumulative export traffic of the Jiangsu Connected Expressway in 2023 was 803.25 million vehicles, an average of 2.2 million vehicles per day, and the electronic toll business picked up rapidly. The company has reached cooperation agreements with 22 ferry operating platforms in Anhui, Zhejiang, Sichuan, Guangdong and other provinces, and 6 platforms have been launched and put into operation.
In 2023, the company's smart traffic operation and management system business revenue was 344 million yuan (+22.29%), accounting for 46.36% of revenue: the company's smart traffic operation management system business now covers 20 provinces and cities across the country. The main products and revenue added in 2023 are state-owned clouds, 10.36 million yuan for high-speed brain cloud control platforms, 19.2 million yuan for AI video analysis cloud control platforms, 11.2 million yuan for toll robots, and 17.84 million yuan for digital twin business.
Smart transportation derivative business deposits massive traffic data elements
In 2023, the smart transportation derivative business revenue was $0.23 billion (+61.37%), accounting for 3.07% of revenue.
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, fueling, 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.
Profit forecast and investment advice: We expect the company's net profit to be RMB 2.65/347/436 million for 2024-2026 (the previous forecast value for 2024/2025 was $3.52/462 million, mainly because the restoration of the electronic billing business in 2023 fell short of expectations and adjustments to the macro-environmental impact), and the corresponding PE was 30/23/18 times, respectively. The company is deeply involved in the field of smart transportation. ETC has maintained rapid expansion and rapid growth in performance. At the same time, it has card position advantages in the field of traffic data, and maintains a “buy” rating.
Risk warning: industry competition intensifies; customer development falls short of expectations; macro-environmental risks;