Recently, the company released its 2023 annual report, achieving full year operating income of 1.98 billion yuan (+24.0%), net profit to mother of 150 million yuan (+144.9%), and net profit of 110 million yuan (+129.3%) after deduction. In 2023, the company's GIS software business grew steadily, and businesses such as housing and construction, data elements, and water conservancy blossomed. Maintain a buy rating.

Key points to support ratings

The GIS software business is growing steadily, and its leading edge has been consolidated. The company adheres to the GIS business platform strategy, and the amount of new Xinchuang contracts signed in '23 increased by more than 100% over the same period last year. Among them, remote sensing AI products have successively won bids for satellite application technology system construction projects in a province (winning bid amount over 10 million yuan), and successfully signed contracts with major customers such as the National Pipeline Network, Sinopec, National Energy Investment, and China Huaneng. The company's leading edge in natural resources business continued to be consolidated. In 23 years, it bid for multiple 10 million orders and won the crown in 14 provinces including Jiangsu, Anhui, and Hebei, further widening the gap with competitors.

Housing and construction, water conservancy, and meteorology have blossomed in many places, and the second growth curve has set sail. In the field of housing and construction, the company has signed CIM platform projects in various cities such as Beijing and Xihu District of Hangzhou. In the future, it is expected to use CIM as a unified digital base to connect the three major business segments of “digital housing, digital construction, and digital urban and rural”; in terms of water, the company broke through more provincial customers, and newly signed water conservancy business contracts increased by about 25% year-on-year in 23; in terms of meteorology, the company built an integrated meteorological platform based on the SuperMap GIS technology system in '23, which has already been applied in 7 provinces.

Deeply cultivate GIS data elements and sign a 10 million yuan big data bureau contract. The company built a spatio-temporal big data platform, and as an “operating system” for data elements, it carried out a comprehensive layout in the fields of data governance, data application capacity center construction, and data operation. In '23, the company signed a contract for the Tangshan Comprehensive Information Platform Construction Project (contract of 21.546 million yuan). Through this project, the company formed solutions and products for the entire business of the Big Data Bureau, laying a solid foundation for the development of subsequent business.

valuations

The estimated net profit for 23-25 will be $3.0, 380, and 470 million yuan (considering the company's increased market development, increased sales investment, and a reduction of 29%), EPS is 0.60, 0.76, and 0.96 yuan, and corresponding PE is 27X, 21X, and 17X, respectively. The company's GIS software business is growing steadily, and businesses such as housing and construction, data elements, and water conservancy have blossomed to maintain purchase ratings.

The main risks faced by ratings

Customer growth falls short of expectations; cost control falls short of expectations.