Incidents:
On June 5, the 2024 Central Control Global Product Launch Conference was held in Singapore. Two disruptive new products, UCS, the world's first general control system and TPT, the first AI timing model for the process industry, were officially launched and fully launched for industrial implementation.
The release of the first general control system, Nyx, can drastically reduce costs. The company innovated and proposed the technical architecture of the next-generation universal control system UCS, built a software-defined, fully digital, cloud-native control system, and completely disrupted the technical architecture of traditional distributed control systems that have continued for nearly 50 years. The company launched the first universal control system UCS product, Nyx, which is based on the real-time cloud operating system NyxOS and deeply integrates cloud-native, all-optical network technology, APL technology and AI control to achieve flexible on-demand definition control and the sustainability of customer knowledge assets, which can significantly reduce costs, reduce cabinet space by 90%, reduce cable costs by 80%, and shorten the construction cycle by 50%.
The first large AI timing model, TPT, was released to ignite the AI engine
The industrial production process uses timing data as the main carrier, and it is difficult for existing large models to touch core industrial scenarios such as abnormal warning, operation optimization, control optimization, and bottleneck analysis. The company launched TPT, the first AI timing model for the process industry, which will completely disrupt problems such as fragmentation of industrial applications and fragmentation of data applications, and enable factories to go from the original N models corresponding to N applications to now use a TPT model as a base to create a new model where software supports various application scenarios. It has the three typical characteristics of “multi-capability”, “cross-device”, and “high reliability”.
The company builds the core competitiveness of “AI+ data”
Generative artificial intelligence continues to develop rapidly and is expected to help industrial enterprises achieve intelligent production, from production planning and equipment maintenance to quality control, improving production efficiency and reducing costs, and has broad application space. Relying on a solid foundation of industrial data, the company has carried out comprehensive exploration in the field of industrial AI, restructured the company's product technology using the latest AI technology, and achieved a series of major breakthroughs. In the future, the company will accelerate the widespread application of industrial AI in various scenarios and implementation in all scenarios to achieve industrialized development, thus completing the transformation and upgrading to an industrial AI company.
Profit Forecasts, Valuations, and Ratings
We expect the company's 2024-2026 revenue to be 106.61/130.77/15.836 billion yuan, respectively, with year-on-year growth rates of 23.68%/22.66%/21.11%, net profit to mother of 12.52/ 15.45/ 19.73 billion yuan respectively, year-on-year growth rates of 13.64%/23.39%/27.68%, EPS 1.59/1.96/2.50 yuan/share, respectively, and a 3-year CAGR of 21.43%. Since the company is a leading enterprise in the field of process industry automation in China, it released disruptive new products and launched applications, transformed and upgraded to an industrial AI company. Referring to comparable company valuations, we gave the company 35 times PE in 2024, with a target price of 55.48 yuan, maintaining a “buy” rating.
Risk warning: Downstream capital expenditure fluctuation risk, product expansion falling short of expectations, overseas market expansion falling short of expectations, exchange rate risk, etc.