Xinchen Technology: Information Solution and Service Provider
Xinchen Technology is a supplier of professional informatization solutions and services based on the self-developed Xinchen exchange platform, with the financial industry as the core, covering industries and fields such as government agencies and large and medium-sized state-owned enterprises and institutions. It provides multi-level industry informatization services such as software development, system integration, and professional technical services. The company's revenue increased from 420 million yuan in 2013 to 1,735 billion yuan in 2023, with a CAGR of 15.24%. Overall, net profit to mother remained stable. Based on the company's continuous promotion of banking IT business and the development of the low-altitude economy industry driving the demand for air traffic control system updates, looking forward to the future, the company's operating income profit is expected to grow at an accelerated pace.
Focus on military aviation control informatization and lay out a low-altitude airspace support system
Xinchen Technology began working on informatization construction in the field of national air traffic control in 2004, focusing on data exchange and information services and basic communication network construction in the air traffic control business operation system. It is currently the core supplier in the field of national military air traffic control informatization data information services, and relies on autonomous and controllable domestic self-developed technological achievements in the fields of blockchain, big data, cloud computing, the Internet of Things, etc., to enable the development of military intelligence. The company lays out its business in the field of air traffic control in three directions, including low-altitude surveillance, low-altitude flight management and service, and low-altitude safety prevention and control, and is actively developing an intelligent low-altitude defense platform with independent intellectual property rights, making it the second pole of growth.
Policies support the low-altitude economy, and the air traffic control sector ushered in major opportunities
This year, the low-altitude economy was first included in the government work report, and it has become one of the hot spots for developing new quality productivity. Central and local policies have been introduced one after another, and this year is expected to be the first year of low-altitude economic development.
Air traffic management is the foundation of the low-altitude economy industry, and air traffic control systems are the core of air traffic management. The air traffic control system is a real-time system that carries out major air traffic control missions and is an important part of the national air defense system. The take-off of the trillion-dollar low-altitude economy places higher demands on low-altitude airspace service guarantee and management capabilities. The air traffic control sector is expected to lead the low-altitude industry and usher in explosive growth, deeply empowering Xinchen Technology.
Investment advice: The company has a strong self-developed core technology platform, which can be developed in a targeted manner according to the needs of industry customers, and has been focusing on the military air traffic control field for many years. It is one of the few domestic suppliers that also provide specialized information services to the financial industry and the military industry. With the rapid development of the low-altitude economy industry, the company's air traffic control information technology business will rise to the next level. The profit forecast is as follows:
In 2024-2026, the company's operating income is estimated to be 21.57/27.11/3.443 billion yuan, net profit to mother of 0.82/1.30/192 million yuan, and earnings per share (EPS) of 0.27/0.43/0.64 yuan, corresponding to the closing price of 13.30 yuan on May 7, 2024. PE is 48.49/30.64/20.65 times, respectively. It is highly recommended, and the first coverage gives a “buy” rating.
Risk warning: 1) macroeconomic downside risk; 2) policy implementation falls short of expectations; 3) industry competition intensifies; 4) progress in technology development and application falls short of expectations; 5) demand falls short of expectations.