Incidents:
The company released the “2023 Annual Report” and “2024 First Quarter Report” after closing on April 26, 2024.
Comment:
Operating revenue and net profit achieved steady growth. Various businesses maintained healthy development. In 2023, the company achieved operating income of 2,228 billion yuan, an increase of 11.65% over the previous year; achieved net profit of 150 million yuan, an increase of 12.27% over the previous year; and realized net profit after deduction of 122 million yuan, an increase of 1.56% over the previous year. The company's product business field has expanded from digital management to R&D and design, production control and AIoT, and continues to promote R&D and market development of Dingjie Athena, a new industrial Internet platform driven by digital intelligence. In 2023, the R&D and design business achieved revenue of 123 million yuan, an increase of 34.43%; the digital management business achieved revenue of 1.27 billion yuan, a year-on-year decrease of 4.20%; the production control business achieved revenue of 334 million yuan, an increase of 21.46% over the previous year; and the AIoT business achieved revenue of 517 million yuan, an increase of 42.02% year on year. In the first quarter of 2024, the company achieved operating income of 406 million yuan, an increase of 13.27% over the previous year; net profit to mother was -9.6937 million yuan; net profit after deducting non-return to mother was -13.9761 million yuan.
The value of industrial Internet platforms is prominent. The AIoT Business Rapid Development Company promotes enterprise equipment automation and intelligent process transformation based on AIoT solutions and services such as Dingjie Athena Industrial Internet Platform, Device Cloud Industrial App, and OT equipment products. The AIoT business achieved breakthrough growth in the mainland China market, and the contract amount increased by 92%. In OT solutions (including AGV cars, automatic storage, AOI testing equipment, robotic arms, machine networking, smart meters, etc.), the company collaborated with ecological partners to increase the cumulative contract amount by 87%; in cloud applications in the equipment industry, the company developed light workshop applications such as remote equipment monitoring, equipment operation and maintenance, carbon inventory, and energy consumption management based on the Internet of Machines and Dingjie Athena, with annual subscriptions of about 1,600 units, an increase of 380% over the previous year.
Continue to explore the implementation of AIGC technology. The Chat series application was recognized by customers in 2023. The company actively explores the integrated application of AIGC technology. Based on a deep understanding of the general needs of enterprises in various industries, the company widely integrates the characteristics of various components of Dingjie Athena and other general models, such as Microsoft and Baidu Wenxin, to improve enterprise operating efficiency, enhance user experience services, and accelerate application development efficiency. The Chat series intelligent question-and-answer robot uses data-driven + ChatGPT natural interaction to help users achieve application scenarios such as data collection, collation, meeting coordination, and project tracking; for how enterprises can convert massive files and files of various types into lightweight and useful information, the company's knowledge-interactive digital employee Dingjie Athena ChatFile enables people to interact in natural language and quickly obtain the required knowledge. In 2023, the company's Chat series applications have been launched by more than 120 customers, mainly in advantageous industries such as equipment manufacturing, auto parts and electronics.
Profit forecasting and investment advice
The company is a leading domestic digital transformation and intelligent manufacturing integrated planning solution service provider, and there is plenty of room for future growth. The company's revenue for 2024-2026 is estimated to be 25.84, 29.47, and 3.308 billion yuan, net profit to mother of 1.84, 2.22, and 264 million yuan, EPS of 0.68, 0.83, 0.98 yuan/share, and the corresponding PE is 24.40, 20.20, and 17.01 times. Maintaining a “buy” rating considering the boom in the industry and the company's room for continued growth in the future.
Risk warning
Risks caused by changes in laws and regulations where overseas shareholders and subsidiaries reside; risk of no actual controller; risk of slowing performance growth; risk of rising labor costs.