Incidents:
The company released its 2023 annual report, achieving operating income of 2,678 billion yuan, a year-on-year increase of 19.77%; realized net profit of 449 million yuan, an increase of 24.32% over the previous year; and realized net profit of 372 million yuan after deduction, an increase of 31.05% over the previous year. The company set an overall operating target for 2024 to reach 550 million yuan in net profit, an increase of about 25% over the same period last year.
Comment:
In Q4 '23, revenue in a single quarter reached a record high, and business performance was steady throughout the year. Looking at a single quarter, Q4 achieved revenue of 853 million yuan in 2013, up 8.4% year on year and 38.25% month on month; realized net profit of 166 million yuan, up 18.36% year on year, up 55.14% month on month; realized net profit after deduction of 120 million yuan, down 3% year on year and 25% month on month. Both revenue and net profit reached record highs. In 2023, the company actively expanded industry applications, built the company's brand influence, vigorously developed overseas markets, and achieved effective growth in the company's overall revenue and net profit. In terms of overseas revenue, the company achieved revenue of 719 million yuan in 23, an increase of 47.64% over the previous year, accounting for 26.85% of revenue, an increase of 5.07pct over 2012. The rapid development of overseas markets is one of the important factors for the company to achieve performance growth in 23 years. The company continues to explore and deeply cultivate the Chaoyang industry, which has the potential for continuous growth in the application of high-precision positioning technology. In particular, it has achieved high growth in the resources and utilities sector and the robotics and autonomous driving sector in 23 years.
The company has built two major platforms around the core technology of high-precision navigation and positioning: a high-precision positioning chip technology platform and a global satellite and terrestrial integrated enhanced network service platform. The high-precision positioning chip technology platform includes complete basic devices such as GNSS chips, boards, modules, antennas, etc.; the global satellite navigation and positioning integration network service platform is based on the core algorithm of the SWAS wide-area enhancement system to provide global customers with accurate, reliable and safe location enhancement services and solutions. In addition to services such as measurement and mapping, displacement monitoring, precision agriculture, land resources surveys, smart city management, etc., it can also cover areas difficult to cover areas difficult to cover ground-based augmentation systems such as oceans and deserts to achieve integrated enhancement of open space service.
Specifically, in terms of products, the company's various high-precision positioning and navigation intelligent equipment and system applications and solutions are mainly used in four major industry sectors: construction and infrastructure, geospatial information, resources and utilities, robots and driverless driving.
(1) Construction and infrastructure sector: The company mainly provides RTK high-precision receiver intelligent equipment, as well as systematic solutions for customers in the construction, engineering, construction and other industries to work in the survey, design, construction, operation and maintenance processes, including automatic grader control systems, pavement information management systems, intelligent compaction systems, and excavator guidance systems.
(2) Geospatial information field: Based on high-precision GNSS+INS+lidar+unmanned flight control technology, the company provides equipment equipped with integrated multi-source sensors on mobile carriers to obtain three-dimensional spatial information, including 3D laser scanners, multi-platform lidars, integrated inspection systems, etc., as well as aerial survey drones and unmanned ship products.
(3) Resources and utilities sector: The company mainly serves customers in agriculture, forestry and public utilities. In agriculture and forestry, the company mainly provides automatic navigation control systems for Beidou agricultural machinery, with satellite leveling systems, agricultural machinery production informatization management platforms, land leveling solutions, intelligent spray control solutions, etc.; in public services, the company provides displacement monitoring system solutions for different industry applications, which can be widely used in geological disasters, mine safety, traffic slope monitoring, water conservancy and hydropower monitoring, emergency monitoring, and building deformation monitoring.
(4) Robotics and driverless driving field: The company has developed terminals such as high-precision, high-dynamic positioning and attitude measurement receivers, which can provide high-precision integrated navigation modules, integrated navigation boards, positioning and direction measurement receivers, portable combined navigation terminals, and seismic measurement antennas for autonomous passenger cars, streetcars, high-speed rail vehicles, port/mining unmanned transport vehicles, logistics robots, etc.
Construction and infrastructure: The global market share continues to rise, and is expected to continue growing steadily in 24 years. The company's construction and infrastructure sector achieved revenue of 966 million yuan in 23 years, an increase of 5.29% over the previous year. In 2023, the company's high-precision receiver intelligent equipment business achieved steady sales growth. The international market continued to grow rapidly, and the global market share continued to increase. In '23, the company launched the “Video Measurement RTK” high-precision receiver intelligent equipment to the market, which integrates satellite navigation, inertial guidance and video photogrammetry technology, supports video measurement and 3D modeling, quickly obtains high-precision 3D coordinates in batches from live video, further improves measurement efficiency and data quality, and solves the measurement problems of unmeasurable and undetectable points in traditional operations. At the same time, the company also launched the 8.0.2 version of Geodetic Communication software, which has millisecond dynamic refresh capability, and greatly improved the fluency of graphic operation, further improving photovoltaics, housing construction, gardens, roads, etc. Industry leading user experience, product and solution competitiveness. In Q1 '24, the country's fixed asset investment increased 4.5% year on year. The growth rate was 0.3 percentage points faster than in January-February, and 1.5 percentage points faster than the whole of last year, showing a steady upward trend. Increased infrastructure investment has spawned demand for the company's surveying and mapping tools such as RTK, aerial survey drones, and unmanned ships. The company's construction and infrastructure sector is expected to grow steadily in 24 years.
Geospatial information: The low-altitude economy will drive growth. The company's geospatial information sector achieved revenue of 425 million yuan in 23 years, an increase of 0.73% over the previous year. Based on high-precision GNSS+INS+lidar+unmanned flight control technology, the company has developed equipment equipped with integrated multi-source sensors on a mobile carrier to obtain three-dimensional spatial information, including multi-platform lidar, airborne lidar, and supporting aerial survey systems, point cloud pre-processing software, point cloud post-processing software, etc., which can obtain all spatial element information in different scenes, enhance the analysis and 3D visual management of various simulation conditions, effectively improving the level and efficiency of operation and maintenance, and achieving the leap from “two-dimensional” to “three-dimensional” data collection. The company is actively developing low-altitude economic business. 3D intelligent products can be used in fields such as the construction of digital platforms for smart city space, emergency monitoring, power inspection, etc., as well as the intelligent acquisition of spatial data required in land surveys, surveys, smart cities, etc., to build a real 3D city. The company also has a drone flight academy, a professional drone training institution authorized by the Civil Aviation Administration of China and certified by the Civil Aviation Pilots Association. It has all levels of training qualifications for all aircraft. Currently, it has trained and transported more than 10,000 qualified pilots.
Resources and utilities: The agricultural machinery autonomous driving business is growing rapidly. The company's resources and utilities sector achieved revenue of 1,127 billion yuan in 23 years, an increase of 41.29% over the previous year. The company's agricultural machinery autonomous driving products have received praise from many users for their advantages such as good performance, excellent price, and continuous technological leadership, and have been rapidly promoted in the market. At the same time, the company also participated in the unmanned farm implementation project, integrating advanced technical methods such as Beidou satellite positioning, automatic control, artificial intelligence, and cloud computing to achieve less manned and unmanned operations in key agricultural production processes such as cultivation, planting, management, and harvesting through intelligent upgrading of traditional agricultural machinery and tools, while supporting the cloud
Supervisory scheduling, statistical analysis and real-time remote control of the platform. In recent years, the agricultural automation market has begun to grow rapidly. The company has identified and grasped market opportunities, and achieved rapid growth in the agricultural machinery autonomous driving business. In terms of displacement monitoring, since 2020, the company has vigorously invested in R&D and innovation of universal geological hazard monitoring equipment, and has achieved a series of application results. By the end of '23, tens of thousands of devices had been used on a large scale in key geological disaster prevention and control provinces across the country, covering more than 10,000 hidden geological hazard sites.
Robots and autonomous driving: High-precision positioning units for passenger cars began to be introduced to customers in batches. The company's robotics and autonomous driving segment achieved revenue of 160 million yuan in 23 years, an increase of 61.64% over the previous year. The company has made a good breakthrough in the passenger car autonomous driving business. By the end of '23, the company had been designated as a designated supplier for autonomous driving location unit business for many car companies, and some related models had been mass-produced. In the future, the company will actively deploy automotive-grade chips, global SWAS wide-area enhancement systems, and continue to invest in optimizing core algorithms to provide customers with more competitive products and solutions. At the same time, the global satellite and earth integrated enhanced network service platform developed by the company will provide differential information services for various high-precision mobile intelligent devices in the future and create integrated solutions.
The high-precision GNSS market is growing rapidly, and the company's market space is broad. According to the “EO and GNSS Market Report (Market Report for “Earth Observation” and “Global Satellite Navigation Systems”) issued by the European Space Program Agency in 2024, the global GNSS market has maintained a good growth trend. Global GNSS downstream market revenue (covering equipment sales and service-related revenue) is expected to grow from €260 billion in 2023 to around €580 billion in 2033, with a CAGR of around 8%. The market for devices is expected to grow from 70 billion euros in 2023 to 120 billion euros in 2033, and will mature over the long term. The value-added services market will grow rapidly, and its revenue is expected to grow from around 190 billion euros in 2023 to more than 460 billion euros in 2033. Looking at the domestic market, according to the “2023 White Paper on the Development of China's Satellite Navigation and Location Service Industry” issued by the China Satellite Navigation and Positioning Association and relevant industry data, the overall output value of China's satellite navigation and location service industry reached 507 billion yuan in 2022, an increase of 6.76% over the previous year. Sales revenue for high-precision related products has grown rapidly from 1.1 billion yuan in 2010 to about 18.3 billion yuan in 2022, with a compound annual growth rate of over 26%.
Beidou is promoting market-based deepening applications. The low-altitude economy is an important gripper, and the company will benefit the core: with the continuous popularity of “+ Beidou” applications, in some industries, Beidou technology and space-time information have broken through the depth of the industry, achieved deepening application, and gradually combined with existing businesses to create a new commercialized, unmanned, and automated production operation model for target industries. As an emerging economic form, the low-altitude economy is based on low-altitude aircraft such as drones and helicopters, combined with modern technology such as information technology, big data, and cloud computing to provide efficient and convenient services to all walks of life. Four departments, including the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, and the Civil Aviation Administration of China, jointly issued the “Implementation Plan for Innovative Application of General Aviation Equipment (2024-2030)”. The Ministry of Industry and Information Technology stated that China will build a number of advanced manufacturing clusters in the general aviation industry in the Yangtze River Delta, Guangdong, Hong Kong, Macao, Chengyu, Jiangxi, etc., to build an integrated innovation and development industrial ecosystem from technology development, product development, demonstration verification to application promotion. The company has developed airborne long-range laser scanning system products, including the AA15 laser scanning system, the AA1400 airborne laser scanning system, etc., as well as surveying and mapping drone P60, P330 Pro, BB4, etc.; based on current accumulation of satellite navigation and inertial guidance, the company is expected to enter the field of flight vehicle navigation systems in the future. We believe that the company will benefit from the low-altitude economy and the historical opportunities of new basic surveying and mapping to build a new growth engine in the fields of smart city construction, urban management, and emergency rescue.
Global market expansion is an important market strategy for the company, and future overseas markets are an important growth point for the company. The company has grasped the golden period of development of the national Beidou industry, responded positively to the “Belt and Road” initiative, entered the international market early, and completed the layout of the global marketing network. The company adheres to the marketing strategy of “laying out the whole country and expanding overseas”, has established a national marketing system with equal emphasis on direct sales and distribution, and has established a strong dealer network overseas. Currently, the company has 36 wholly-owned subsidiaries (grandchildren) in major provinces across the country, 1 holding company and 7 participating companies, set up 8 overseas subsidiaries (grandchildren) and 1 representative office in the US, Southeast Asia, etc., and 1 holding subsidiary in Russia. The company has a marketing team with strong business capabilities and a hardworking and enterprising marketing team, which mobilizes resources to build professional teams to provide customers with system applications and solutions, laying a solid foundation for the company's market expansion. The perfect global marketing network gives the company certain advantages in market demand information collection, end user feedback, product improvement and follow-up services. At the same time, the company has a marketing team with strong business ability and hard work, and flexibly mobilizes resources to build professional teams to provide customers with system applications and solutions, laying a solid foundation for the company's market expansion. The company's products and solutions cover many continents, countries and regions around the world to provide differentiated products that meet local needs. Using the good cost performance advantages of GNSS intelligent equipment, we can further increase overseas market revenue and achieve the supply of diversified products, expand the company's influence in overseas markets and enhance brand stickiness.
Profit forecast, valuation and rating: Based on the company's 24Q1 performance forecast and the 24-year operating target situation, the 24-25 net profit forecast was lowered from 618/81 million yuan to 571/708 million yuan, an adjustment of -8%/-13%, and the net profit forecast for 26 was increased to 850 million yuan. The corresponding PE for 24-26 was 25/20/17X, respectively. Looking ahead to 24 years, the company has broad scope for growth in overseas markets. Products such as high-precision positioning terminals, lidars, 3D intelligent surveying and mapping, and drones will benefit deeply from the rise of the low-altitude economy. At the same time, the boom in measurement, surveying and mapping equipment in the main business has also recovered, maintaining a “buy” rating.
Risk warning: Overseas market development falls short of expectations; new business development falls short of expectations.