Core views
The company released the 2023 Annual Report and the 2024 First Quarter Report. In 2023, the company actively responded to the severe and complex market situation, and achieved effective qualitative and quantitative growth in business performance, achieving operating income of 1,776 billion yuan, an increase of 1.38% year on year; net profit to mother of 189 million yuan, up 3.74% year on year; net profit after deducting non-return to mother was 167 million yuan, up 4.07% year on year. 2024Q1, the company's development trend is positive, achieving operating income of 429 million yuan, an increase of 2.02% over the previous year; net profit to mother was 55 million yuan, an increase of 3.18% over the previous year. Net profit without return to mother was 55 million yuan, an increase of 8.58% over the previous year, and the company's operating performance improved. The company has significant advantages in shipping data resources. The Chuanshibao series of products and shipping models accelerate the company's strategic transformation, which is expected to benefit from the implementation of “Data Factor X”, lead the development of shipping data elements, and give it a “buy” rating.
occurrences
On April 3, the company released its 2023 annual report. The company achieved operating income of 1,776 billion yuan, an increase of 1.38% year on year; net profit to mother was 189 million yuan, up 3.74% year on year; net profit after deducting non-return to mother was 167 million yuan, an increase of 4.07% year on year.
On April 29, the company released its report for the first quarter of 2024. The company achieved operating income of 429 million yuan, an increase of 2.02% over the previous year; net profit to mother was 55 million yuan, an increase of 3.18% over the previous year. Net profit after deducting non-return to mother was 55 million yuan, an increase of 8.58% over the previous year.
Brief review
In 2023, the company's profit side was under pressure, 2024Q1 performance gradually recovered, and the development trend was positive. In 2023, the company actively responded to the severe and complex market situation, and achieved effective qualitative and quantitative growth in business performance, achieving operating income of 1,776 billion yuan, up 1.38% year on year; net profit to mother of 189 million yuan, up 3.74% year on year; net profit after deducting non-return to mother was 167 million yuan, up 4.07% year on year. The R&D investment was 105 million yuan, an increase of 76.64% over the previous year. The main reason is that the company firmly implements innovation-driven development strategies, promotes the company's transformation to a product type and platform type, and guarantees and continues to increase R&D investment.
2024Q1, the company released its report for the first quarter of 2024. The company achieved operating income of 429 million yuan, an increase of 2.02% over the previous year; net profit to mother was 55 million yuan, an increase of 3.18% over the previous year. Net profit without return to mother was 55 million yuan, an increase of 8.58% over the previous year, and the company's operating performance improved.
There are more than 1,000 corporate customers for the Chuanshibao series products, and Nuggets shipping data elements have achieved phased results. As an important driving force for the company's platform-based strategic transformation, the Chuanshibao series products are currently in the continuous promotion stage of application functions. (1) Continuous optimization of Chuanshibao series products. Dispatcher, Yunlibao, and SceneBao/ Safety Bao have been newly upgraded. Low-carbon treasure enables AI energy consumption and emission tracking calculation for more than 30,000 major merchant ships (containers, dry bulk, liquid bulk carriers) around the world. (2) The advantages of shipping data resources are remarkable, and it is expected that it will continue to benefit from the implementation and development of “Data Factor X” and open up new space for the company to grow. The Shipshibao platform has accumulated 80 million pieces of data on the entire life cycle of ships, with an average increase of more than 40,000 pieces per day. Relevant data products have been listed on the Shanghai Data Exchange and the Jiangsu Big Data Trading Center in East China. There are more than 1,000 enterprise users of the Chuanshibao series products, providing 961 data API interfaces, and the number of individual users has exceeded 80,000. Relying on the data integration platform and Xiaoai's digital operation platform, digital management solutions are proposed externally.
A large shipping vertical model was created based on the advantages of data resources, and the large model of intelligent search and human-robot interaction gradually passed actual ship verification. The company relies on the general-purpose big model and open source big model research to construct a large vertical model, and has now formed a large model of intelligent search and a large model of human-computer interaction. Among them, the ship situation sensing system accelerated the construction of a large data set on sea surface targets in the sea area. The number of effective samples exceeded 1 million, the sea surface target recognition rate reached more than 95%, and various intelligent subsystems such as virtual reality enhanced observation, collision risk warning, assisted berthing, and duty observation warning have passed actual ship verification. The behavior sensing system has established an active alarm mechanism for multiple scenarios such as duty monitoring, team safety, and piracy prevention, etc., to achieve an early warning accuracy rate of over 97%.
The demand side remains strong, and the total amount of related transactions is expected to double. In 2023, the actual amount of daily related transactions between the company and related parties such as COSCO SHIPPING Group, the Shanghai Shipbuilding Research Institute and its controlled legal entities (or other organizations) was 636 million yuan, of which 60 million yuan was purchased and labor received; 560 million yuan was sold and labor provided; and 15 million yuan was leased. It is estimated that in 2024, the total amount of daily related transactions between the company and related parties such as COSCO SHIPPING Group, the Shanghai Shipbuilding Research Institute and its controlled legal entities (or other organizations) is 1,238 million yuan, of which 77 million yuan will be purchased; 1,145 million yuan will be sold and labor provided; and leases will be 15 million yuan.
Looking ahead to 2024: Pragmatically promote the construction of a “big model” and a “big platform”, gross margin is expected to continue to improve. (1) Transformation from project type to product type and platform type. Strengthen the R&D and construction of the shipping data center and the ShipShibao series of products, strengthen the circulation of shipping data elements, and build an “i Shipping” platform. (2) Participate in the operation and management of the Green Digital Smart Ship Service Platform Company and the “Easy Shipping” Platform Company. (3) Pragmatically promote the construction of “big models” and “big platforms”. In 2024, the company will adhere to “internal empowerment” and “industrial construction” two-wheel drive to accelerate the transformation from a project-type to a product-type and platform-based enterprise. Gross margin may continue to improve, and business performance is expected to improve steadily. Furthermore, with the implementation and development of “Data Factor X”, the company has outstanding advantages in shipping data resources, which is expected to lead the development of shipping data elements.
Investment advice: Shipping data resources have significant advantages. The Chuanshibao series of products and large shipping models accelerate the company's strategic transformation, and are expected to benefit from the implementation and development of “Data Factor X”. In 2023, the company actively responded to the severe and complex market environment, and maintained effective qualitative improvement and reasonable volume growth in business performance. As the company continues to optimize its shipborne series products and move from actual ship verification to the promotion and application stage, the company is expected to accelerate the strategic transformation from a project type to a product type and platform enterprise. In addition, the company has significant advantages in shipping data resources. It is expected to benefit from the implementation and development of “Data Factor X”, lead the development of shipping data elements, and open up new space for the company's growth. We expect the company to achieve operating income of 19.58/21.18/2,287 billion yuan in 2024-2026, achieve profit due to mother of 2.04/2.26/255 million yuan, PE 30.93/27.80/25.03 times, and give it a “buy” rating.
Risk analysis
1) Risk of increased market competition: The market segment size continues to increase, user needs tend to diversify, and the industry competition pattern is becoming more and more intense. Leading equipment suppliers and large Internet companies rely on advantages such as technology, capital, and position to “cross border” operations to intensify industry competition. Integrated industrial chain operations within large industry groups have increased barriers to competition.
2) Risk of innovation and transformation: With the continuous development of new technologies such as mobile Internet, big data, cloud computing, and the Internet of Things, new technology is deeply integrated with the transportation, shipping, and logistics industries, and the business needs of the market evolve along with it. There is still uncertainty about whether the company can keep up with cutting-edge technology trends and establish its core competitiveness.
3) Risk of related transactions: There are ongoing daily related transactions between the company and the controlling shareholders and their related parties. The company strictly complies with the “Company Law” and related laws and regulations to regulate approval procedures for related transaction decisions, and has established a relevant internal control system, but there is still a risk that future related transactions of the company will be unfair.