Incident: The company announced its report for the first quarter of 2024, which achieved operating income, net profit attributable to mother, and net profit of 4.19 billion yuan, 0.02, and -013 billion yuan respectively, with year-on-year changes of +56.44%, -62.08%, and -75.32%, respectively.
Comment: The main business revenue is growing rapidly, the online business is gaining momentum, and the layout is leading in emerging fields such as the low-altitude economy. According to the company's first quarter report, 24Q1 revenue growth rate reached 56.44% year-on-year, mainly due to the company's continued deepening implementation of the group and ecological development strategy, and the continuous strengthening of the main business market development in various industry segments within the group. On the profit side, the company's net profit growth rate was significantly lower than the revenue growth rate. Apart from its own profit in the first quarter of the year in recent years (for example, net profit attributable to mother in the first quarter of 2023 was about 1.5% of the full year, 23Q1 was 0.05 billion yuan, and the full year 23 was 343 million yuan), mainly due to the following reasons: product structure affected the gross margin level, 24Q1 gross margin decreased by 3.39 percentage points compared to 23Q1; and due to the increase in profit and loss of minority shareholders during the reporting period, as well as the increase in personnel and fixed expenses of the company. The 24Q1 net profit of the company was RMB 18 million, with a year-on-year growth rate of 56.46%, with minority shareholders' profit and loss of RMB 16 million. In terms of cash flow, the company's ability to repay is relatively stable. The year-on-year growth rate of receiving cash from sales of goods and provision of labor was 15.93% year-on-year in 24Q1. We continue to emphasize platform-based integration as one of the company's core competencies, and new tracks such as the low-altitude economy are expected to open up new growth points. For example, according to the company's official account in March, the company's subsidiary Starmap Intelligence has specially developed a targeted innovative product based on the low-altitude intelligent networking service system. The low-altitude flight control and service platform, the digital intelligence low-altitude brain, has technical advantages such as real-time airspace data and space analysis capabilities, unified spatio-temporal management of Beidou grid codes, effective monitoring and identification of low-altitude targets, and accurate meteorological services.
Profit forecast and investment advice: EPS is expected to be 1.33, 1.87, and 2.55 yuan/share in 24-26, respectively. Considering the company's technical strength, business synergy and new market expansion, we will maintain a reasonable value of 63.75 yuan/share, corresponding to a PE of 48X in 24, maintaining an “gain” rating.
Risk warning: technology iteration, seasonal fluctuations in performance, business integration, macro risk, etc.