Key points of investment

The company disclosed the 2023 annual report, with revenue of 2,516 million (YoY +59.54%), net profit of 343 million (YoY +41.10%), net profit of 230 million (YoY +37%); single Q4 revenue of 1,116 million (YoY +48.98%), net profit to mother of 239 million (YoY +39.57%), net profit of non-return to mother of 174 million (YoY +28.23%).

First curve: Remarkable results of clustering, and ecological results are steadily showing. Looking at business segments, the revenue in 2023 is 836 million yuan (YoY +15.68%), aerospace surveying and operation control of 229 million (YoY +61.08%), smart government 742 million (YoY +106.87%), meteorological ecology 382 million (YoY +101.58%), and corporate energy of 231 million (YoY +111.4%); the company continues to deepen in existing fields, build a middle platform for industry applications, and at the same time continue to expand and expand in detail through a series of mergers and acquisitions racetrack It is expected to continue to achieve rapid growth in performance through a grouped horse racing mechanism;

Second curve: Efficiently empowering space information developers, achieving scenario verification and early entry into the harvesting stage. The company split its online business for the first time in 2023, and achieved revenue of 121 million yuan and a gross margin of 86.18%. Relying on the GEOVIS Earth online digital earth product system, the company formed three major online service systems for cloud data, cloud computing and cloud applications, and realized online transformation and upgrading of core technology and business transformation and upgrading. It is expected to target Google Earth in the future to form an online ecosystem for BC-side customers;

The low-altitude economy has a clear first-mover advantage and is expected to enjoy industry dividends

The company has been deploying in the low-altitude economy since 2020. In the early stages, it already has a foundation of low-altitude navigation products and projects. The relevant business layout covers the main directions of low-altitude service infrastructure platform product research and development, and related industrial ecological construction around low altitude. In the future, it is expected to provide more comprehensive solutions for application scenarios in the fields of low-altitude logistics, navigation transportation, urban management, public services, etc., to enjoy industry dividends;

Continued to increase R&D investment and improve internal skills, and the cash flow was drastically corrected. The company continued to increase R&D investment and promote GEOVIS Earth series product research and development. The R&D expenditure rate reached 14.81% in 2023 (0.67pct year-on-year increase). We expect the company to continue to increase R&D efforts in the future; the company implemented effective capital management measures to increase repayment efforts, and net cash flow from operating activities in 2023 was 125 million, an increase of 154 million over the same period last year (from negative to positive);

Profit forecasting and valuation

We expect the company's 24-26 revenue to be 36.42/51.60/7.203 billion (+44.76%/41.70%/39.59%), net profit to mother of 4.82/6.94/988 million (YoY +44.02%/38.00%), corresponding PE of 44.02/30.56 /22.15, maintaining a “buy” rating.

Risk warning

Risks such as orders from major downstream customers falling short of expectations, low altitude economic policies and orders falling short of expectations, group integration affecting profit margins, technological progress falling short of expectations, and increased competition;