Focus on the high-quality development of core businesses, and profits have improved dramatically. In 2023, the company achieved operating income of 1,936 million yuan, a year-on-year decrease of 2%; net profit to mother of 117 million yuan, an increase of 92%; and net cash flow from operating activities of 406 million yuan, compared to -217 million yuan in the same period last year, a significant improvement. In the first quarter of 2024, the company achieved operating income of 488 million yuan, an increase of 1.36% year on year; net profit to mother was 91 million yuan, an increase of 226% year on year. In 2023, the company focused on strategic customers, continuously optimized business quality, and focused on the high-quality development of core business; further optimized the business structure, increased the business capabilities of its own products and solutions, and enhanced the company's long-term core competitiveness; revenue declined: individual major customers had a long settlement cycle for major projects, which caused project delivery, acceptance and settlement to be delayed from the time point agreed in the contract.

The revenue structure continues to improve, and the data business and credit business continue to gain strength.

Data business. Guided by the “T+F+N” data strategy, the company continues to improve its digital capabilities and improve its data center product line through the support of digital innovation technologies such as knowledge maps, AI, big models, and flow computing. At the same time, the company's deep experience and accumulation in the digitization of the financial industry has begun to integrate and support penetrating financial scenarios in other industries such as healthcare, government affairs, and automobiles. In the field of data business, the products of the TanData Explorer Data Platform family have been implemented in more than 100 customer projects. The company also increased its investment in data asset product development and initially formed the TanEasy Exploration Data Asset Family. “Easy to ask”, which is based on a large model, began training in interpreting policy provisions, questions and answers relating to regulatory ticket indicators, and preparing analytical reports. After the industry corpus training is initially formed, it will have certain independent reasoning capabilities; the technology research and development of the “Tanyi Intelligent Computing Knowledge Map” based on graph calculation has begun to be successfully used in implementation projects and R&D projects related to index attribution analysis, data quality inspection and traceability, and regulatory reporting. Through the componentized encapsulation of emerging technologies and business logic, a “data commercialization and technical transparency” data asset capability system was initially formed.

Credit business. In 2023, the company developed by leaps and bounds on the basis of continuous cooperation in the credit business line stabilizing stock business. Revenue related to the credit business line was at the leading level in the market throughout the year, and the number of customers for credit-related projects increased by more than 18, including 5 new large-scale comprehensive credit projects. The transaction amount of each project increased significantly compared to previous similar projects. All new credit projects included a large number of big data applications, making the whole product and the whole process intelligent, online, and mobile. Some credit projects also incorporated large models to assist banks in the credit business process Both aspects of technology have completed digital transformation, providing agile support for future scenario-oriented business innovation in the bank credit business.

Jointly build a financial supercomputing research and development center with Hunan University, and actively invest in large-scale models and computing power. Based on the supercomputing platform of the National Supercomputing Center in Changsha, the company and Hunan University will jointly build a financial supercomputing R&D center to promote the upgrading of technology to empower the financial industry and enhance the core competitiveness of Tianyang Technology. From January 26, 2024, the company expects to invest no less than 200 million yuan in the next five years to Hunan University (National Supercomputing Center in Changsha) to build the “Tianyang Technology - Hunan University Financial Supercomputing Joint Innovation Center”. Cooperative research and development is mainly carried out in the following fields: (1) research on key technologies for the application of domestic supercomputing systems in the financial field; (2) multi-modal large model training and inference platforms for financial risk control; (3) data-driven intelligent credit models and dynamic tracking systems; (4) intelligent customer service digital employees and AI brains; (5) financial security assessment and intelligent early warning analysis; and (6) intelligent financial information recommendation and AIGC key technologies. At the same time, the following cooperation was agreed upon:

1. Resource services such as computing power and storage: In response to Tianyang Technology's future medium- and long-term business development plans, Hunan University (National Supercomputing Center in Changsha) will provide financial supercomputing-related resource services such as GPU, CPU, and storage. Dynamic resource scheduling, computing power resource networking, and capacity expansion can be carried out according to the needs of Tianyang Technology.

2. Research on key technical difficulties: Focus on Tianyang Technology's technical difficulties in the fields of financial big data, financial model construction, and intelligent computing models, integrating superior resources from multiple disciplines to help Tianyang Technology form a number of AI models and algorithm libraries with independent intellectual property rights, and enhance the core competitiveness of Tianyang Technology's financial products and financial services. etc.

Increase the capital of Global Air Transport and lay out satellite communication operations. In February 2024, the company invested 50 million yuan in capital increase (30 million yuan in cash and 20 million yuan in assessed intellectual property prices) to obtain 9.09% of Global Aircom's shares after the capital increase was completed. Global Air Communications is a solution provider and operator that provides broadband communication services for civil aviation institutions. Tianyang Technology has the advantage of deep-seated scenario services in the financial field, senior R&D and implementation capabilities, and many years of expertise in bank marketing platforms and business fields. In order to give full play to the advantages of both parties and achieve win-win cooperation, the two sides plan to establish a joint venture (Tianyang Technology's shareholding ratio is not less than 51%), and the joint venture will undertake financial services-related services related to the financial sector in the civil aviation airborne Internet communication platform that Global Airlines has the right to operate as an exclusive supplier to achieve resources Share and complement each other's advantages to promote the extension and development of the company's products and services.

Profit forecasts and investment recommendations. We believe that the company currently focuses on high-quality development, continues to improve its revenue structure, invests heavily in financial models and computing power, and actively seeks development in the transformation of the AIGC era. Invest in global navigation and lay out a new business circuit. The company is expected to usher in new opportunities for development. Entering 2024, the company assumes that the company's R&D is smooth, market competitiveness continues to increase, and technology development, technical services and system integration equipment have achieved restorative growth. In 2024-2026, technology development will give growth rates of 8%, 10%, and 11% respectively; technical services will be given growth rates of 5%, 8%, and 10%, respectively; and system integration equipment will be given growth rates of 5%, 5%, and 5% respectively. Revenue from consulting services maintained steady growth, with growth rates of 20%, 20%, and 20% respectively in 2024-2026.

We expect the company's revenue for 2024-2026 to be 2,076/22.73/2,518 billion yuan, respectively, net profit to mother of 134/1.60/195 million yuan, and EPS of 0.33/0.39/0.48 yuan respectively, giving the 2024 dynamic PE 45-55 times, and a reasonable value range of 14.88-18.19 yuan for 6 months, giving the first coverage a “superior to the market” rating.

Risk warning. The company's business progress falls short of expectations, and industry policy risks.