Event Overview: Zhongke Xingtu released its 2023 annual report. In 2023, the company achieved operating income of 2,516 billion yuan, a year-on-year increase of 59.54%; realized net profit of 343 million yuan, an increase of 41.10% over the previous year; realized net profit without deduction of 230 million yuan, an increase of 37.00% over the previous year.
Comment:
The company's profitability is stable, and the proportion of R&D investment continues to increase. The company's net interest rate in 2023 was 19.16%, which remained stable; the sales/management expense ratio continued to decline, at 7.45%/7.89%, respectively, down 1.31/0.29pct year-on-year. The company generated R&D investment of 572 million yuan in 2023, up 67.02% year on year. R&D investment accounted for 22.74% of revenue, up 1.02 pct year on year, of which capitalization accounted for 35.53%. The main reason was that the company continued to introduce high-end technical talents throughout the year to promote GEOVIS Earth online product iteration.
Civilian business is booming, and applications in emergency, agriculture, water conservancy and other industries have high potential for growth. The company's civilian business grew significantly. By industry, the company's aerospace surveying and operation control/smart government/meteorological ecology/enterprise energy business achieved revenue of 2.29/7.42/3.82/230 million yuan respectively, an increase of 61.08%/106.87%/101.58%/111.74% over the previous year. Some of the company's downstream sectors are booming, and its high growth is expected to continue: 1) Smart agriculture, smart water conservancy, emergency and other sectors will continue to benefit from special treasury bond financial support; 2) The “Implementation Plan for Innovative Application of General Aviation Equipment (2024-2030)” proposes to encourage leading enterprises to explore and form a business model integrating product development, scenario construction, and demonstration operation in the fields of low-altitude logistics, general aviation transportation, urban management, and public services; The company currently has a low-altitude navigation product and project foundation, which can be applied to low-altitude logistics, general aviation transportation, urban management, public services, etc. The scenario provides comprehensive solutions, and the future is expected to benefit from industrial policy drivers and the maturity of low-altitude economic business models.
Second growth curve The online business developer ecosystem is gradually improving. During the reporting period, the company's online business achieved revenue of 208.041 million yuan and is beginning to take shape. In terms of ecology, the online business received 20,914 personally certified developers and 21,192 certified enterprise developers throughout the year. Developers built 13,769 active ecological applications based on the digital Earth's online capabilities, reaching a total of 45.55 million end users. The number of developers and users grew rapidly compared to 3Q23. In terms of products, the company's online digital earth product service system has been gradually improved, forming a service system for cloud data, cloud computing, and cloud applications. The gross margin of the online business is as high as 86.18%, and the expansion of business scale is expected to optimize the company's overall profit level.
Investment advice: Give a “buy” rating. From 2024 to 2026, the company is expected to achieve revenue of 35.31.4819 billion yuan, an increase of 40.38%/36.5% year on year; net profit to mother of 485/670 million yuan, an increase of 41.5%/38.3%/37.52% year on year.
Risk warning: Business promotion falls short of expectations; industry competition intensifies.