It is a leading enterprise in the field of air traffic control, and its business performance is growing steadily. Established in 1988, Nanjing Rice Information is the main window and platform for the consumer goods market. As an overall solution provider for civilian command information systems, Rice Information mainly provides overall command information system solutions and series products with command and control technology as the core. It targets informatization needs in the fields of traffic management, urban road traffic management, and urban governance in civil aviation, and provides information system services covering top-level design, overall solutions, product development, system integration, and service operation. In recent years, the company's operating performance has grown steadily. In 2019-2023, Rice Information's revenue increased from 1,023 billion yuan to 1,676 billion yuan. During the period, the CAGR was about 13.1%, the net profit to mother increased from 36.31 million yuan in 2019 to 132 million yuan in 2023, and the net profit margin increased from 3.55% in 2019 to 7.88% in 2023.

The air traffic control industry is rapidly expanding, and the low-altitude economy is driving future growth space. The air traffic control system CNS/ATM is the core of the traffic management system in civil aviation, and the air traffic control system ATC is also the core part of the air traffic control system. The Civil Aviation Administration has always attached importance to the development of the air traffic control system, and has successively introduced a number of policies to promote the development of the air traffic control industry. In recent years, the low-altitude economy has developed rapidly, and the number of infrastructure such as general aviation airports continues to increase, and demand for low-altitude air traffic control systems is expected to continue to grow rapidly. At the same time, the low-altitude economy's requirements for safe operation in various airspace scenarios and complex scenarios such as high-rise buildings also place more and higher demands on air traffic control systems in the low-altitude field. The development of the low-altitude economy will open up room for future growth in the air traffic control industry. According to the China Investment Industry Research Institute, the market size of China's low-altitude economic infrastructure, represented by air traffic control systems, is expected to exceed 40 billion yuan in 2030.

Based on the civil aviation management business, expand the construction of a low-altitude economy and explore the application of data elements. 1) Give full play to its advantages and take root in civil aviation informatization: In the field of air traffic management, the company strengthens strategic leadership for core products, expands its advantages, and takes a steady lead. On the product side, the new NUMEN-5000 air traffic control automation system has been optimized and upgraded; on the market side, the company has achieved important project implementation and breakthroughs in the fields of air traffic control automation, tower automation, and air traffic control big data applications. At the same time, in the field of airport informatization, the company makes full use of benchmark solutions such as Huai'an and Yangtai to strengthen product and business promotion, and is expected to achieve rapid growth in this field. 2) Entering the low-altitude economy and opening up a new blue ocean of civil aviation: As one of the current strategic emerging industries, the low-altitude economy has received strong support from all levels of the country and is expected to become a pillar industry needed by the country and the industry. The company leverages its product technology accumulation and advantages in civil aviation management systems, and lays out products such as general aviation flight services and unmanned flights to advance into the future low-altitude intelligent connectivity system. 3) Deepen the development of industry data resources and actively explore the application of data elements: under the trend of data element development, the company's market, product and technical advantages, respond positively to the national “data element ×” action, and accelerate the layout of data element business. In terms of data operation services, the company's products are mainly aimed at data authorities and authorized data operators, focusing on the needs of enterprises to carry out various application scenarios such as finance and business operations. The main products include data element governance support systems, credit data element application systems, and financial credit data service platforms.

Profit forecast and investment advice: We expect the company's revenue for 2024-2026 to be 19.94/23.45/27, respectively.

Of the 5.9 billion yuan, net profit attributable to mother was 1.61/2.02/263 million yuan respectively, and the corresponding PE was 70/56/43 times, respectively.

As a leading enterprise in the domestic civil aviation management field, it is expected that its traditional civil aviation management business will continue to expand its leading edge, and the airport information technology business can be expected to expand rapidly. At the same time, in the context of the rapid development of the low-altitude economy, the company is expected to quickly replicate traditional business technical capabilities into the low-altitude economy product business, and has now carried out discussions and cooperation with relevant departments in various regions. Based on the above, we believe that the company can have a certain valuation premium, and for the first time coverage gives the company an “gain” rating.

Risk warning: risk of loss of technicians and rising technical personnel costs; risk of product development and technology upgrades falling short of expectations; risk of increased industry competition; risk of macroeconomic fluctuations; risk of delayed information or untimely updates in public data used in research reports; risk of deviations in industry size measurement, etc.