Core views:
Incident: The company announced its 2023 annual report. In 2023, it achieved operating income of 2,516 billion yuan, an increase of 59.54% over the previous year; achieved net profit of 482 million yuan, an increase of 58.81% over the previous year; and achieved net profit of 343 million yuan, an increase of 41.10% over the previous year.
Comment: The synergy between enterprises on the first curve circuit and ecological business is remarkable. The second curve online business is reaping ahead of schedule, and emerging fields such as the low-altitude economy are being laid out ahead of schedule. According to the company's 2023 annual report, through the design and promotion of the “horse racing” mechanism, track companies are effectively encouraged to forge ahead, expand various market segments, comprehensively promote ecological construction, promote collaboration between racetrack companies and ecological businesses, enrich digital earth products and services, and expand new business growth space. During the reporting period, the company's special fields, space surveying and operation control, smart government, meteorological ecology, and enterprise energy achieved revenue of 8.36, 2.29, 7.42, 3.82, and 231 million yuan respectively, with year-on-year increases of 15.69%, 61.08%, 106.87%, 101.58%, and 111.74%, respectively. The first growth curve achieved steady and accelerated growth. Among them, measurement and operation control, smart government, and meteorological ecology increased significantly during the same period, mainly due to the full implementation of the company's group strategy, accelerated business exploration by various subsidiaries, and continuous breakthroughs were achieved. The company's second growth curve grew rapidly. Under the cloud service model, the gross margin was higher than the overall. In '23, the online business achieved revenue of 121 million yuan, with a gross margin of 86.18%. Platform-based integration is one of the company's core competencies, and new tracks such as the low-altitude economy are expected to open up new growth points. According to the company's 2023 annual report, the company has been deploying in the low-altitude economy since 2020. It already has a foundation for low-altitude navigation products and projects in the early stages. The relevant business layout covers the main directions of low-altitude service infrastructure platform product research and development, and development of a complete solution for low-altitude service solutions, and ecological construction of related industries around low altitude, providing comprehensive solutions for application scenarios in the fields of low-altitude logistics, general aviation transportation, urban management, and public services.
Profit forecast and investment advice: EPS is expected to be 1.33, 1.87, and 2.55 yuan/share in 24-26, respectively. Considering the company's technical strength, business synergy and new market expansion, we will maintain a reasonable value of 63.75 yuan/share, corresponding to a PE of 48X in 24, maintaining an “gain” rating.
Risk warning: technology iteration, seasonal fluctuations in performance, business integration, macro risk, etc.