Considering the company's leading position in the air traffic control field, coverage was given a “buy” rating for the first time
We expect the company's 2024-2026 net profit to be 1.74, 2.26, and 291 million yuan, EPS 1.07, 1.38, and 1.78 yuan/share, respectively. The current stock price corresponds to PE 69.6, 53.7, and 41.7 times, respectively. The company's valuation is higher than the average valuation level of comparable companies. Considering the company's leading position in the air traffic control field and forward-looking layout in the low-altitude economy, it is expected that the future will benefit greatly from major industry trends in the low-altitude economy, and for the first time, coverage will be given a “buy” rating.
Leading civil aviation management automation leader, far leading market share
The company is the core development platform for the E-KLESS consumer goods industry and the only listed company under the E-KLESS system. The company has a leading market position in the fields of air traffic control automation systems, air traffic control scene management systems, and air traffic control simulation training systems. According to statistics from Sansheng Consulting, as of December 2022, the national air traffic control system had 7 regional bureaus and 37 branch stations, with a total of 44 air traffic control users. Of these, 35 air traffic control users used automated systems provided by the company, and the system coverage rate reached 80%. Each air traffic control user has a total of 88 air traffic control automated operation systems, of which the company provides 37 sets, with a market share of 42%, and far leading the market share.
The construction of additional civil aviation regional control centers is about to be accelerated, which is expected to bring about an expansion of industry demand. According to the “14th Five-Year Plan”, the “14th Five-Year Plan” will further improve the overall layout of the country's “region-terminal (approach) - tower”, optimize the high and medium airspace structure, promote the construction of regional control centers in an integrated manner, and add second regional control centers in regions with saturated flight volume, complex airspace structures, and prominent operational conflicts. The construction of air traffic control automation for the new regional control center is expected to bring significant incremental business requirements to the company.
Accelerate the business layout, and aim to become the main force in the construction of a national low-altitude economy leading low-altitude intelligent connectivity services. The Central Economic Work Conference also raised the low-altitude economy to the level of a strategic emerging industry, and the low-altitude economy industry ushered in a period of rapid development. In response to the major changes in transportation methods triggered by the low-altitude economy in the future, the company can provide large-scale, high-density, flexible and autonomous low-altitude intelligent support systems in low-altitude urban traffic operation scenarios. The main products include national/provincial/municipal low-altitude flight service management platforms, flight service centers/service stations, and drone control systems for surface application scenarios. Relying on the technology and product advantages the company has accumulated in civil aviation management, the company is expected to become the main force in low-altitude economy construction leading low-altitude intelligent connectivity services.
Risk warning: Competition in the industry intensifies; risk of losing core technical personnel.