Key points of investment:
Accelerate the deployment of the Internet of Vehicles to enable high-quality industrial development. Wanma Technology was founded in 1997 and listed on the Shenzhen Stock Exchange in August 2017. It is one of the famous manufacturers of communication electronics and physical communication connection equipment in China, as well as a high-tech enterprise integrating R&D, production, sales and service. With the transformation and upgrading of the business, Wanma Technology entered the Internet of Vehicles industry. Its wholly-owned subsidiary, Youka Technology, is engaged in the Internet of Vehicles business model to procure basic communication services and content services from basic telecom operators and content providers. It has independently developed a connection management and ecological service platform for car companies, and provides car companies with vehicle networking connectivity and ecological operation products and services. In 2023, Wanma Technology achieved total revenue of 520 million yuan, an increase of 2.35% over the same period last year. Among them, the Internet of Vehicles revenue increased from 10.10% in 2021 to 34.16% in 2023, making it currently the fastest growing business segment.
The “Vehicle Networking Ecological Chain+Autonomous Driving Data Closed Loop Tool Chain” go hand in hand. As a high-tech enterprise in the field of vehicle networking, Uka Technology continues to develop the three core products of iteration: Vehicle Internet Connection Management Platform (CMP), Intelligent Operation and Maintenance Management Platform (MNO), Internet of Vehicles Ecological Operation Management Platform (TOSP), and the newly released closed-loop tool chain platform for autonomous driving data, providing professional products and services for many mainstream car companies. Youka Technology is actively expanding strategic cooperation and has successively established strategic partnerships with the Ya'an Economic Development Zone, Yufan Intelligence, and Langge Technology to optimize the company's layout in the field of intelligent and connected automobiles.
Profit forecast: The company's revenue for 2024-2026 is estimated to be 585/725/987 million yuan, respectively, and net profit to mother is 0.92/1.37/211 million yuan, respectively. Using the relative valuation method, the average PE of comparable companies in 2024 was 79 times, giving the company 79 times PE in 2024, corresponding EPS was 0.68 yuan, and the target price was 53.72 yuan. For the first time, coverage gave a “buy” rating.
Risk warning: The penetration rate of smart cars falls short of expectations; the implementation of business terms between the company and important customers falls short of expectations; competition in the smart driving market continues to intensify.