A leader in the smart transportation industry that has been deeply involved for many years. 1) The company is a professional artificial intelligence technology product and service provider in China. It provides full-stack artificial intelligence technology products and solutions from basic theory and core algorithms to full-scenario applications. From the perspective of business scenarios, the company focuses on one main circuit (smart rail transit, smart city transportation) and two business scenarios (enterprise digital upgrading and smart city governance). 2) In 2023, the company firmly promoted the orderly completion and delivery of intelligent rail transit projects in Guangzhou, Chengdu and other places, and seized new infrastructure construction opportunities to develop digital transportation markets in many places. New orders increased year-on-year, achieving operating income of 6.228 billion yuan and net profit of 395 million yuan to mother.
Smart transportation continues to expand, and large models are empowering the ceiling. 1) Currently, the urban congestion problem is quite serious, and there is an urgent need for smart cities and smart transportation. According to data from the China Business Industry Research Institute, in 2024, China's smart city market will reach 33 trillion yuan, broken down into smart transportation. Currently, only a few important cities are mature. Most second- and third-tier cities still have a lot of room for development. According to sharp consulting forecasts, China's smart transportation market will exceed 400 billion yuan in 2023. 2) AI for industry will be a new flashpoint for artificial intelligence in the future. Huawei lays out a big model in the transportation sector, which is expected to further raise the ceiling of the industrial space.
The technical foundation continues to be iterated, and sedimentation builds strong barriers. 1) Based on the integration of artificial intelligence and big data, the company continues to improve the development and implementation of digital infrastructure systems for rail transit and urban traffic, and build data barriers in the transportation industry. Currently, it has built two major technical bases, “Huajia Mos Metro Smart Brain” and “IDPS Urban Traffic Brain”, respectively, in rail transit scenarios and traffic scenarios. While optimizing business profitability, it is also building strong technical barriers for the company. 2) In 2023, the company added 126 new patents, obtained 82 patent authorizations, and obtained 71 software copyrights. The patent resource pool is extremely deep, forming a strong technical moat and multi-dimensional AI capability reserves, and large-scale model applications are expected to be implemented. 1) In 2023, the company took the lead in releasing the industry's first large urban traffic AI model, the Jiadu Zhixing Transportation Industry Big Model, providing generative artificial intelligence services such as intelligent traffic customer service, intelligent operation and maintenance of facilities and equipment, and fully empowering and upgrading traffic scenario applications and user experiences. It is in the first tier in the SuperClue Chinese Big Model Ranking (December 2023), the industry's authoritative comprehensive evaluation benchmark for general Chinese models. At the same time, through continuous optimization and iteration, the company has now formed a large knowledge model product series such as PCITransgpt, the large visual model Trancore-VIS, the multi-modal large model Trancore-M, and the large spatio-temporal decision model Trancore-TS. 2) The company has now established two research institutes+four national R&D institutions, forming the foundation of the company's AI research capabilities, laying out computer vision, intelligent big data, and digital twins to form a comprehensive technical layout, empowering various scenarios such as subways, policing, and traffic management, while investing in many AI-related companies to build an ecosystem.
Covered for the first time, a “gain” rating was given. Considering that the company has plenty of orders in hand and the continuous consolidation of its technical base around the two major scenarios of rail transit and transportation, we expect that in 2024-2026, the company's net profit to mother will be 0.83/1.93/309 million yuan, respectively, corresponding to the closing price on June 28, 2024. PE will be 95.8/41.3/25.8 times, respectively. For the first time, coverage was given, giving a “gain” rating.
Risk warning: economic downturn exceeds expectations, fiscal expenditure falls short of expectations, international competition intensifies