Smart transportation business expansion boosted performance, and ETC and operation management systems grew steadily. The company responds positively to national policies, develops new applications such as ETC+ vehicle-road collaboration, further opens up business space, expands the boundaries of traffic data element development and application, and has broad development space.
Event: Tongbao announced the results for the first quarter of 2024. The company's revenue for a single quarter was 153 million yuan, YoY +14.77%; net profit to mother was 45 million yuan, YoY +9.65%; deducted non-net profit was 45 million yuan, YoY +9.57%. Sales/management/R&D expenses were 0.16/0.15/011 million, YoY +3.51%/-20.34%/+10.86%, respectively. Net operating cash flow of -107 million yuan was achieved in a single quarter compared to -143 million yuan in the same period last year.
The ETC and smart transportation business are driving growth in performance. In the first quarter of 2024, Tongbao's smart transportation electronic billing, smart traffic operation management system, and smart transportation derivative businesses all achieved significant growth. Specifically, revenue from the smart transportation electronic billing business reached 93.3886 million yuan, accounting for 61.04%, an increase of 11.61% over the previous year. This increase was due to the company's continuous optimization of the ETC product system and the vigorous development of market cooperation agents and Internet cooperation channels. The smart traffic operation management system business revenue was 53.5742 million yuan, accounting for 35.02%, an increase of 29.32% over the previous year, mainly due to the increase in revenue from the AI video analysis cloud control platform project and the charging robot project. The revenue from the smart transportation derivative business was RMB 6,025,500, accounting for 3.94%.
Gross margin was generally stable in 24Q1. Looking at a single quarter in the first quarter of 2024, the company achieved a gross profit margin of 52.93%, a year-on-year decrease of 0.56pct. Among them, the gross margin of the smart transportation operation management system business was 47.21%, down 5.89pct from the previous year. Mainly due to the low gross margin of the new AI video analysis cloud control platform, the gross margin of the company's overall main business remained basically stable, mainly benefiting from the increase in the gross margin of the electronic billing business brought about by the reduction in the purchase unit price of ETC equipment.
Favourable policies and technological innovation are two-wheel drive, and attention is paid to the new space for ETC+ vehicle-road collaboration. The company responds positively to national policies, such as the “Highway Network Toll System Optimization and Upgrade Project Plan”, promotes the implementation of intelligent highway service solutions, and expands ETC+ vehicle-road collaborative applications. At the same time, the company grasps market trends and responds to market opportunities through the growth of ETC business, the promotion of smart traffic operation management systems, and the development of smart transportation derivative businesses. Continue to make efforts in the application of new technology to promote new smart transportation cloud products such as high-speed brains and AI video analysis cloud control platforms. Furthermore, the new ETC+ vehicle-road collaboration application is expected to bring new space to the company for ETC business and traffic data elements.
Maintain a “Highly Recommended” investment rating. The company's performance has grown steadily, and new applications such as ETC+ vehicle-road collaboration have further opened up business space, expanded the development and application boundaries of traffic data elements, and the overall business space is broad.
The company's net profit for 2024-2026 is estimated at 2.42/2.90/342 million yuan, corresponding to PE30/25/21 times 2024-2026. Maintain a “Highly Recommended” investment rating.
Risk warning: Policy progress falls short of expectations; smart transportation operation management system business development falls short of expectations; downstream demand fluctuates.