The quarterly report was in line with expectations and maintained a “buy” rating
The company released its 2024 quarterly report, and overall performance was in line with expectations. Driven by the policy, the construction of transportation information technology is expected to accelerate. The company is expected to continue to benefit and is optimistic about the company's long-term development. We maintain our profit forecast. We expect net profit to be 604, 7.33, and 884 million yuan for 2024-2026, EPS of 0.38, 0.46, and 0.56 yuan. The PE corresponding to the current stock price is 23.7, 19.5, and 16.2 times, maintaining a “buy” rating.
The company released its 2024 quarterly report. The overall performance was in line with expectations for 2024 Q1. The company achieved revenue of 1,580 billion yuan, a year-on-year increase of 0.74%, realized net profit of -58 million yuan, a year-on-year decrease of 136.71%, and realized net profit without return to mother of 15 million yuan, an increase of 22.81% year on year.
The company's overall performance was in line with expectations. The decline in profit was mainly due to changes in the price of Hongquan IoT shares held by the company. Gross margin fell 1.12 percentage points year over year to 29.11%. Sales, management, and R&D expenses increased by 3.85%, 5.49%, and 12.53%, respectively.
The company released employee stock ownership plans, demonstrating confidence in long-term development
On April 17, the company released the employee stock ownership plan (draft). The performance evaluation index is that based on 2023, the revenue growth rate for 2024-2026 will not be less than 8.42%, 19.71%, 34.21%, or the non-profit growth rate excluding share payment expenses will not be less than 73.33%, 131.11%, and 203.34%. According to this estimate, the compound revenue growth rate of the company in 2024-2026 is about 10.3%, and the compound growth rate of non-profit excluding share payments is about 44.8%. The company will continue to improve quality and efficiency, raise profit levels, and demonstrate confidence in the company's long-term development. The company's shareholding plan is expected to effectively retain outstanding management talents, enhance the company's core competitiveness, and benefit the company's long-term development.
Driven by the policy, the construction of transportation information technology is expected to accelerate. The company is expected to continue to benefit in March 2024. The State Council issued a trillion-dollar equipment renewal and consumer goods trade-in action plan, making it clear that the scale of investment in transportation equipment in 2027 will increase by more than 25% compared to 2023. Traffic informatization is of great significance for refined traffic management, improving traffic efficiency and safety, and reducing logistics costs for the whole society. Driven by policies, traffic informatization is expected to accelerate development. At the same time, traffic informatization is the foundation for the development of traffic data elements. With the gradual improvement of digital perception of traffic facilities and information network coverage, the value of traffic data elements is also expected to be further activated. The company continues to deploy in the field of traffic informatization and traffic data elements, and is expected to fully benefit.
Risk warning: Smart transportation orders fell short of expectations; shipments of IoT products fell short of expectations.