Incident: The company released its 2023 annual report. In 2023, the company achieved operating income of 2,516 billion yuan, an increase of 59.54%; net profit attributable to shareholders of listed companies was 343 million yuan, an increase of 41.10% over the previous year; and realized net profit of 230 million yuan after deduction, an increase of 37.00% over the previous year.
The first growth curve grew steadily, and the second growth curve entered the harvest period. The company's first growth curve achieved steady growth in 2023. The specialty sector industry grew steadily at a growth rate of 15.69%; the aerospace surveying and operation control, smart government, meteorological ecology, and enterprise energy industries increased significantly year-on-year, with 61.08%, 106.87%, 101.58%, and 111.74% respectively, mainly due to the full implementation of the company's group strategy, and accelerated business exploration and continuous breakthroughs. The company used the cloud service model to create a second growth curve. Relying on the Geovis Earth online digital earth product system, it has formed three major online service systems for cloud data, cloud computing, and cloud applications, and has achieved online transformation of core technology and business transformation and upgrading. During the reporting period, the company completed the verification of the second growth curve scenario and entered the harvesting stage ahead of schedule. The online business generated revenue of 20.804 million yuan, and the gross margin reached 86.18%.
Investment in R&D was increased, and the cost ratio continued to decline during the period. The scale effect showed that the company's gross profit margin in 2023 was 48.33%, which is basically the same as the same period last year. With the rapid expansion of the company's revenue scale, the expense ratio continued to decline. The company's expense ratio in 2023 was 28.83%, falling for three consecutive years. Among them, the sales expense ratio was 7.45%, down 1.31 pct from the same period last year; the management expense ratio was 7.98%, down 0.29 pct from the same period last year. The R&D cost rate was 14.81%, an increase of 0.66 pct over the same period last year. The company continued to increase R&D investment. R&D investment accounted for 22.74% of revenue, and the capitalization ratio was 35.53%.
The low-altitude economy is expected to further expand the new application scenario “Low Altitude Economy +” for space information. The application scenarios of “Low Altitude Economy +” are becoming more and more abundant. As the low-altitude economy is upgraded to a national strategy, Policy+ Industry is continuously promoting the implementation of the “Low Altitude Economy +” application scenario. Currently, application scenarios that are already being explored commercially include logistics, tourism, agriculture, fire protection, and inspection. With the drastic increase in the number of aircraft, especially the number of unmanned aerial vehicles, and the improvement of collection performance, the application scenarios for space information will increase more and more, forming sophisticated application requirements in various fields such as agricultural monitoring, urban management, and environmental monitoring. The company began deploying in the low-altitude economy sector in 2020. In the early stages, it already has a foundation for low-altitude navigation products and projects. The relevant business layout covers major directions such as low-altitude service infrastructure platform product research and development, and low-altitude service ecosystem development, and related industrial ecological construction around low altitude, and can provide comprehensive solutions for application scenarios in the fields of low-altitude logistics, general aviation transportation, urban management, and public services.
Investment advice
We expect the company to achieve revenue of 34.84/4.787/6.524 billion in 2024-2026, an increase of 38.5%/37.4%/36.3%; achieve net profit to mother of 491/64/ 903 million, an increase of 43.4%/33.2%/37.9%; the corresponding EPS is 1.35/1.79/2.48, respectively, and the corresponding dynamic PE is 38.9/29.2/21.1. Maintain a “Recommended” rating.
Risk warning: Risk of increased competition in the industry; risk of new business progressing less than expected.