Introduction to this report:

For the introduction, please summarize the findings of this report in one or two sentences. Note that the core ideas, exceeding expectations, and differentiations in this report should not be listed, and no public data should be listed to describe known information.

Key points of investment:

Maintain the target price of 26.76 yuan and maintain the “gain” rating. Maintaining the profit forecast, the 2024-2026 EPS was 0.60, 0.74, and 0.91 yuan, respectively. The target price was maintained at 26.76 yuan, and the “increase” rating was maintained.

The performance was in line with expectations, and financial expenses continued to drag down the profit side. The company released a quick report on its 2024 semi-annual results. In 2024, H1 achieved total revenue of 0.328 billion yuan, a year-on-year increase of 18.18%. Among them, the Q2 revenue growth rate was 21.32%, which is significantly faster than Q1's 14.77%. Achieved net profit of 0.106 billion yuan to mother, an increase of 8.01% year over year. Affected by the decline in market interest rates, the company's ETC deposit interest rate decreased by 11.6058 million yuan compared to the same period last year. Excluding these effects, the company's actual profit growth rate will match the revenue growth rate. The impact of Q1 was already reflected in expectations, so overall results were in line with expectations.

The cornerstone ETC business grew steadily, and the growth of the vehicle road cloud related business accelerated. By business segment, the smart transportation electronic billing business achieved revenue of 0.183 billion yuan, an increase of 5.31% over the previous year. ETC issuance and liquidation are the cornerstone business of the company, maintaining steady growth and contributing to a solid performance base for the company. The smart traffic operation management system business related to the vehicle road cloud achieved revenue of 0.126 billion yuan, a sharp increase of 38.86% over the previous year. The growth rate was significantly higher than 22% in the full year of 2023, confirming the boom in the smart transportation industry.

The state-owned capital background is strong, and Jiangsu Cheluyun Construction has opened up room for growth. On July 3, the Ministry of Industry and Information Technology jointly released a list of pilot cities for integrated vehicle road cloud applications. Among them, three Jiangsu cities, Nanjing, Suzhou, and Wuxi, were on the list, and Jiangsu became the province with the largest number of vehicle road cloud pilot cities in the country. The “Notice on Supporting and Guiding the Digital Transformation and Upgrading of Highway and Waterway Transport Infrastructure” issued by the Ministry of Transport and the Ministry of Finance in May also requires that the relevant plans be declared before the end of June, and Jiangsu is likely to be the first batch of projects to be implemented as a major transportation province. As a key unit under the Jiangsu Traffic Control Group, the company is expected to rely on its shareholder background to occupy a large market share in high-speed informatization and urban vehicle road cloud projects in the province, opening up room for growth.

Risk warning: Policy progress falls short of expectations; business outside the province is blocked.