Computer Vision and Biometrics Multimodal BioCV Leader
The company is an international enterprise in the multi-modal “computer vision and biometric identification” (BioCV) field. The company's products cover hardware products and software products, and use intelligence as a line to connect different product portfolios to create diverse intelligent solutions to meet the needs of thousands of industries. As demand for downstream fragmentation increases, the company continues to expand its rich product array and can provide a full range of product services in various segmented scenarios such as smart entry/exit management, smart identity verification, and smart office. At the same time, we are actively deploying smart retail cloud services to provide digital products and services for public service users, enterprise users and individual users. From 2020 to 2022, the company was on the list of “Global Security Top 50” companies selected by ASMAG for three consecutive years, ranking 14th, 13th, and 12th respectively. In the field of single biometrics, the company has successfully developed biometrics technology. Among them, the fingerprint recognition algorithm for resident ID cards has been approved by the regulatory authorities and listed in the “Resident ID Card Fingerprint Application Algorithm Quality Consistency Assessment and Inspection List”, making it one of the seven approved manufacturers.
Overseas revenue is growing steadily, and sales channel capabilities are strong
The company's overseas revenue in the first half of 2023 was 631 million yuan, up 15.15% year on year. The share of overseas revenue increased from 54.75% in 2020 to 67.29% in the first half of 2023, maintaining stable overseas business growth capacity. After years of development, the company has accumulated rich experience in operating channel products, has more customer resources, and has established a relatively complete global marketing service network system, with sales channels and service networks in many countries and regions around the world. At the same time, the company actively lays out online sales channels and has established a comprehensive online marketing network on major e-commerce platforms and self-built shopping malls. International, domestic, online and offline integration complement each other, forming a strong marketing service network advantage. As of June 2023, the company has set up 45 overseas subsidiaries, located in 29 countries and regions around the world, with product sales covering more than 100 countries and regions.
Various products are adapted to open source Hongmeng to create the Xinchuang software and hardware ecosystem. In order to jointly promote independent innovation and development, Entropy-based Technology attaches great importance to domestic adaptation of domestic products. Its 8 ID card readers and fingerprint collectors have completed debugging and adaptation to the open source Hongmeng System (OpenHarmony), which can provide Hongmeng system ID decoding libraries and fully meet Hongmeng's software and hardware development needs.
As the technical activity unit of the Information Technology Application Innovation Working Committee, Entropy-based Technology has always actively participated in building the Xinchuang software and hardware ecosystem, providing a basic guarantee for the expansion of the Xinchuang field. In the Xinchuang product adaptation certification, the company's multi-category and multi-model products have completed compatibility certification for chips including Feiteng, Kunpeng, Longxin, Haiguang, AMD64, Hisilicon, etc., as well as operating systems such as Tongxin and Kirin, to help improve the Xinchuang industry chain and jointly build a localized Xinchuang ecosystem.
Investment advice
The company's 2023-2025 EPS is expected to be 1.16, 1.47, and 1.87 yuan, respectively, and the PE corresponding to the current stock price is 21.56, 17.00, and 13.44 times, respectively. The company is a leading enterprise in the multi-modal “computer vision and biometrics” (BioCV) field. It is deeply involved in smart entrances and exits, smart identity verification, and smart office, and is actively deploying smart retail. The share of overseas business continues to increase, gross margin continues to improve, and it is covered for the first time, giving it a “buy” rating.
Risk warning:
Product development progress falls short of expectations; market competition increases risk; technology implementation falls short of expected risk.