Digitalization empowers the transformation of the construction industry. The construction informatization market is poised to launch in 2020-2022. China's construction information technology market size is 316.7/381/47.04 billion yuan respectively, with a year-on-year growth rate of 15.88%/20.30%/23.46%. We estimate that China's construction informatization penetration rate is expected to reach 0.21%/0.24%/0.29% in 2024-2026, and the market size is expected to reach 732.766/887.69/1136.98 billion yuan; of these In 2024-2026, it is expected to reach 374.00 /453.08/58.031 billion yuan, an increase of 23.67%/21.14% /28.08% year-on-year, and the 10 billion construction informatization market is ready to go.

Guanglianda: In ten years, the digital construction business helped the industry's information technology construction information technology construction company, as a leader in building information technology, began to accumulate project management products in 2002. In 2014, the company proposed the smart construction site concept and expanded its business to on-site informatization. In 2017, the company proposed the concept of “second entrepreneurship” in the 7th three-year plan, and in subsequent development, the company sought to stabilize the old business, achieve a deep scale of construction business, and actively broaden the business field, from housing construction to infrastructure, and accelerate the expansion of the blue ocean of infrastructure. In 2022, the digital construction business achieved annual revenue of 1,326 billion yuan. The cumulative number of service projects for digital construction project-level products exceeded 90,000, and served more than 7,000 customers.

Product side: “Four Little Dragons” launches performance growth engine

The construction business vision is to build a “digital construction site”. In 2024, the company will focus on the most core application scenarios for customers at the project level, namely material management, personnel management, schedule management, and safety management, which is expected to achieve large-scale deployment of products such as labor, materials, tower cranes, and zebra progress.

Market side: Refining sales strategies and focusing on leading customers

(1) Customer classification: The company divides customers into three categories: enterprise-level, project-level, and job-level to actively connect with enterprise-level customers to help customers systematically sort out their informatization needs; in the face of project-level customers, the zebra schedule intelligent planning platform for job-level customers can provide enterprise managers with professional, intelligent, and easy-to-use schedule planning and management (PDCA) tools and services; (2) Sales strategy: In the face of drastic changes in the market environment, the company actively transforms sales strategies and actively explores central state-owned enterprise customers in terms of regional layout. Seize leading regions in the construction industry, actively explore infrastructure, municipal administration, industrial construction and other projects at the project level, and focus on technological innovation at the product level; (3) “Four Little Dragons”: Empowering the product matrix, deepening the project-level and job-level markets, opening up all aspects of data elements from project to enterprise, and providing services throughout the entire project cycle.

Profit forecasting and valuation

We expect the company's total revenue in 2024-2026 to reach 69.94/74.82/7.996 billion (+6.56%/6.99%/6.86%), and net profit to mother of 6.92/9.23/ 1.09 billion (+497.03%/33.48%/9.35%), respectively, maintaining the “buy” rating.

Risk warning

Other risks such as actual customer demand and new product promotion falling short of expectations, progress in synergy effects and intelligent function upgrades falling short of expectations, risk of increased competition, and overall industry risk.