Incident: The company released its 2023 annual report and achieved annual revenue of 2,516 billion yuan, an increase of 59.54% year on year; net profit to mother was 343 million yuan, an increase of 41.1% year on year.
Revenue and profit achieved a high increase, and cash flow improved significantly
In 2023, the company achieved operating income of 2,516 billion yuan, an increase of 59.54%; net profit to mother was 343 million yuan, an increase of 41.1% year on year; net profit without return to mother was 230 million yuan, an increase of 37% year on year. In terms of business direction, the company's revenue in municipal administration, meteorology and marine, and enterprise energy management systems all doubled, with a year-on-year growth rate of 107%/102%/112%; although the specialty products business was adversely affected by the industry environment, it still increased 16% year over year. In terms of management, the company strengthened control over the entire life cycle of the project and increased its efforts in cost control, cost control, and repayment management. The sales expense ratio and management expense ratio were 7.45%/7.98%, down 1.31 pct/0.29pct from the previous year. Net operating cash flow of 125 million yuan at the end of the period increased by 154 million yuan compared to the beginning of the year, providing sufficient impetus for the company's future high-quality development.
The group strategy has achieved remarkable results, and the “horse racing mechanism” has shown results
The company seizes major opportunities for aerospace information technology development and implements the strategy of grouping and ecology. According to Wind statistics, the company participated in 40 holding and joint ventures at the end of '23, an increase of 21 over the end of '22. Among them, the net profit of Starmap Space, Weitianxin, Star Map Intelligence, and Star Map Measurement and Control for 23 years was 0.61/1.06/0.63 billion yuan, an increase of 48.22%/91.39%/50.42%/22.45% over the previous year.
The subsidiary benefits from the company's brand empowerment, capital empowerment, innovation empowerment and market empowerment, and is growing rapidly. Through the horse racing mechanism, the company has incubated more high-quality subsidiaries to enter the capital market. Among them, Starmap Measurement and Control received the “Notice of Acceptance” issued by the Beijing Stock Exchange on December 14, 2023, and Starmap Weitianxin has also carried out stock reform work. In the future, the company is expected to further enrich Digital Earth products and services through a group strategy and expand new business growth directions.
Multi-directional layout, continuous expansion of business areas
The company relies on digital Earth's deep technology accumulation and market expansion to continuously build technical advantages such as satellite remote sensing, artificial intelligence, high-performance computing, and big data processing, and expand downstream business fields.
Beidou grid code helps fly the low-altitude economy: On March 27, the Administration of Industry and Information Technology/Finance/Civil Aviation jointly issued the “Implementation Plan for Innovative Application of General Aviation Equipment (2024-2030)”. The low-altitude economy ushered in historical development opportunities. The company began deploying in the low-altitude economy sector in 2020, and already has a foundation of low-altitude navigation products and projects in the early stages. The company's joint subsidiary, Beidou Fuxi, supports the construction of a low-altitude intelligent network and the low-altitude digital economy in China based on the Earth's spatio-temporal grid framework theory by Professor Cheng Chengqi of Peking University and the national and international standards related to the Beidou grid code that it participated in the preparation of. The company uses the Beidou grid code as the core, and combines Weitianxin's meteorological services, Starlight's battery service, and 3D urban modeling of Star Map Earth to create a low-altitude circle, which is expected to benefit deeply from increased demand in the industry in the future.
Commercial space broadens the application of space information: In 2023, the Central Economic Work Conference put forward clear requirements for building a number of strategic emerging industries such as commercial aerospace and low-altitude economy. On the one hand, the subsidiary Star Map Surveillance and Control uses space science and next-generation information technology to provide space monitoring and control management services; on the other hand, with the gradual increase in commercial remote sensing satellites, application scenarios and customized markets for remote sensing data are expected to gradually open up, and the company's downstream application scenarios are expected to continue to be enriched.
There is great potential for marine capacity building: Ocean perception is an important part of the company's “air, front, sky, earth, and sea” integrated layout. The company lays out the marine and underwater fields through Zhongke Xingtu Deep Sea and Star Map Sea Whale to create a full-process closed-loop business of ocean sensing equipment, ocean data services, and marine “three checks” services. The ocean is an important field for major powers to compete. Ocean construction may enter the fast track of development, and the company is expected to benefit deeply.
Profit forecast: The company continues to consolidate its main business and broaden downstream application scenarios, and has a multi-dimensional layout in commercial aerospace, low-altitude economy, etc., and is expected to take off in the future. At the same time, along with the rapid development of the second-growth curve business built on the cloud service model, the company's profitability is expected to further improve. We forecast the company's revenue for 2024-2026 to be 35.98/50.28/6.858 billion yuan, net profit to mother of 485/6.83/927 million yuan, corresponding PE of 39.9/28.36/20.9X, maintaining the “recommended” rating.
Risk warning: risk of macroeconomic fluctuations; increased risk of competition; risk of market development falling short of expectations