Event: Dash Intelligence released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 3.833 billion yuan, an increase of 6.64% year on year; net profit to mother was 115 million yuan, a year-on-year decrease of 45.80%.
In 2024, Q1 achieved operating income of 590 million yuan, a year-on-year decrease of 4.52%; net profit to mother was 0.4 billion yuan, a year-on-year decrease of 79.22%.
The decline in gross margin puts pressure on profits. The company's gross margin in 2023 was 23.89%, down 2.99 pcts year over year.
During the reporting period, the gross profit of the overall smart space solution business declined due to factors such as increased competition in the industry and large reduction amounts in the completion and settlement audits of some hospital projects.
Increase investment in R&D, and innovate and upgrade AIoT. In 2023, the company raised 700 million yuan in capital through fixed increases, of which 310 million yuan is planned to be invested in R&D. In 2023, the company's R&D expenses were 89 million yuan, a slight increase of 3.62% over the previous year. With the efficient use of funds raised, the company successfully achieved the innovative upgrade of the v6 version of the Dashi AIoT intelligent IoT management and control platform, optimized the user experience, broadened the application scope of the platform, and enhanced its flexibility. Companies in the field of innovation have also achieved certain results. The platform-based IoT application system has successfully obtained the Kunpeng Technology Certification Certificate and the Feiteng Certification Qualification Certificate, and the adaptation to domestic hardware continues to improve.
The projects that won the 2024Q1 contract are picking up. Affected by the market environment, tenders for some key projects were postponed in 2023. At the same time, due to the company's enhanced project screening efforts, the total amount of projects signed and won by the company for the whole year was 2,943 billion yuan, a decrease of 34.43% over the previous year. 2024Q1, the company signed contracts for projects such as China Merchants Bank headquarters building and Guanglianda's South China headquarters base, and continued to maintain a competitive advantage in various smart space service segments. The total amount of signed and bid projects was 1,215 billion yuan, an increase of 54.48% over the previous year.
Investment advice: Affected by factors such as the macro environment and industry competition, the company's gross margin declined in the short term, putting pressure on the profit side. In the first quarter of 2024, the amount of the company's winning projects began to pick up, and the superimposed company continued to invest in R&D. We are optimistic that the company will continue to invest in core platforms and key system research and development through fixed growth and other methods, strengthen the company's core competitiveness, and achieve breakthroughs in the innovation sector and other businesses. We predict that in 2024-2026, the company will achieve revenue of 4.236 billion yuan, 4.727 billion yuan, and 5.379 billion yuan; net profit to mother of 192 million yuan, 231 million yuan, 311 million yuan; EPS 0.09, 0.11, 0.15, PE 31X, 26X, 19X, and maintain a “buy” rating.
Risk warning: industry competition intensifies; technological transformation falls short of expectations; order delivery falls short of expectations; changes in industry policies.