Core views

2024H1, the company achieved rapid net profit growth, industry expansion results gradually became apparent, and the resources, utilities and overseas sectors maintained rapid growth. The company is a leading enterprise in the domestic high-precision satellite navigation and positioning industry. It focuses on R&D system planning and construction, and gradually strengthens the company's core competitiveness in the field of high-precision positioning and navigation. The company has achieved breakthroughs in fields such as autonomous driving for agricultural machinery, autonomous driving for passenger vehicles, and geological hazard monitoring programs. At the same time, the company continues to develop overseas markets and actively layout a marketing network. The overseas market space is broad and the company has obvious advantages, which is expected to contribute new momentum to the company's performance growth.

occurrences

The company announced the 2024 semi-annual results forecast. In the first half of 2024, the company expects to achieve net profit of 0.243 billion yuan to 0.253 billion yuan, an increase of 38.27%-43.96% over the previous year.

It is estimated that net profit after deduction will be 0.202 billion yuan to 0.212 billion yuan, an increase of 28.87%-35.25% over the previous year.

Brief review

1. The effects of expanding industry application scenarios have been shown, and net profit has grown rapidly.

In the first half of 2024, the company expects to achieve net profit of 0.243 billion yuan to 0.253 billion yuan, a year-on-year increase of 38.27%-43.96%. It is expected that 24Q2 will achieve net profit of 0.14 billion yuan to 0.15 billion yuan, a year-on-year increase of 45%-55%, and a year-on-month increase of 36%-46%. Excluding the impact of share payment fees of about 27 million yuan due to the implementation of the equity incentive plan, the growth rate is even higher. The company continues to cultivate in industries such as farm automation, geological hazard monitoring, and autonomous driving, and has shown results in actively expanding downstream application scenarios. The company has participated in widespread disaster monitoring projects in many places, and revenue in related business areas has grown rapidly. 2024H1, the company actively expands industry applications, builds the company's brand influence, achieves rapid revenue and net profit growth in related business fields such as resources and utilities, increases investment in R&D, builds core technical barriers, enables autonomous control of key core devices, enhances the competitiveness of the company's products, and helps the company expand rapidly in various industry markets.

2. The two basic platforms build core advantages and help the company build an industrial ecological chain.

Based on high-precision algorithm technology, the company has formed a complete high-precision positioning chip technology platform, including basic devices such as high-precision GNSS chips, boards, modules, and antennas. The company has measured data for tens of thousands of typical user scenarios, continuously refines the applicability and advanced nature of core algorithms, builds core technical barriers, and creates low cost, low power consumption and high performance of basic devices to maintain product competitiveness. Up to now, the company has developed and mass-produced basic devices such as the high-precision GNSS baseband chip “Xuanji” and various high-precision GNSS boards, modules, antennas, etc., making the core technology autonomous and controllable. The company will further invest in the research and development of high-precision GNSS core chips to enhance the competitiveness of core technology.

The company attacks the core algorithm of the SWAS wide-area enhancement system, builds a global satellite navigation and positioning solution platform, and provides accurate, reliable and safe location enhancement services and solutions to customers around the world. The company obtained the Geodetic Survey Class A surveying and mapping qualification certificate. Through its own domestic high-density reference station network and CORS service algorithm, the company achieved a deep integration of “cloud same origin” and “hardware device+software account service”, greatly improving the user experience of terminal products, and also providing CORS account services to other users in the industry. The global satellite and ground integration network service platform not only satisfies high-precision positioning requirements such as surveying and mapping, displacement monitoring, precision agriculture, land resources surveys, smart city management, etc., but also enables integrated airspace enhanced services. In the future, the global satellite and earth integrated network service platform will also provide high-precision location information for autonomous vehicles, various robots, etc., and build an ecological chain for the industry.

3. Multiple businesses go hand in hand to improve competitiveness in all aspects.

In the field of construction and infrastructure, the company provides high-precision location information for the survey, design, construction, operation and maintenance work of customers in the construction, engineering, construction and other industries based on various high-precision positioning equipment and system applications and solutions. In 2024, the company's advantages in construction and infrastructure are expected to continue to improve; in the field of geospatial information, the company provides measurement, surveying and mapping solutions for smart cities, autonomous driving, land surveys, hydrological monitoring and other fields through a combination of high-precision GNSS+INS and measurement technologies such as lidar, unmanned flight control, and unmanned ship control, etc., to achieve good marketing results. At the same time, the company is also actively exploring new technology applications in the field of geospatial information, and launching Huazuyun services, wide-area enhanced services, etc.; in the field of resources and utilities, the company has successively promoted the development of the geospatial information industry. Products such as agricultural machinery navigation, autonomous driving, operation guidance, satellite leveling, operation quality management and monitoring, and agricultural machinery production management systems have been developed. Based on the core technology of Internet of Things+Beidou high-precision positioning, the company has developed displacement monitoring system solutions for different industry applications, and has achieved a series of application results. The company's agricultural machinery autonomous driving products have received praise from many users for their advantages such as good performance, excellent price, and continued technological leadership, and have achieved rapid promotion in the market, consolidating the company's dominant position in the market. In the field of robots and driverless driving, the company relied on the core technical advantages of combined navigation algorithms to develop terminals such as high-precision, high-dynamic positioning and azimuth receivers, leading the formulation of relevant industry standards and leading the preparation of standards for “Vehicle Mobile Measurement Systems” to fill gaps in international and domestic industry standards. The company has been designated as a designated supplier for autonomous driving position unit business for many car companies, and some related models have been mass-produced. In the future, the company will actively deploy automotive-grade chips, global SWAS wide-area enhancement systems, and continue to invest in optimizing core algorithms to provide more competitive products and solutions.

4. The reputation of overseas markets continues to rise, and the layout of the global network is expected to continue to contribute new volume.

The company has a good reputation in the industry, and overseas market attention continues to increase. The company's agricultural machinery navigation autonomous driving system series has attracted widespread attention worldwide.

After years of technology accumulation, the company rapidly promoted overseas product categories. While maintaining the continuous growth of RTK products, the company promoted agricultural machinery autonomous driving products to form a certain scale and maintain a rapid growth trend, providing users in more than 100 countries and regions around the world with high-quality agricultural machinery navigation products and solutions with high accuracy, high quality, high efficiency and high reliability, and achieved rapid growth in overseas market share.

We are committed to expanding the global business layout and building the core competitiveness of enterprises in overseas markets. The company held an international agency conference. In the future, it will further enhance the company's global influence by digging deeper into market segments, forming specialized local service teams, strengthening product iterative innovation, building diversified product portfolios, and expanding new directions in industry applications. At present, there is still plenty of room for improvement in the penetration rate of the company's products in overseas markets. At the same time, compared with overseas companies, it is expected that overseas markets will continue to contribute new momentum to the company's performance growth in the future.

5. Investment advice: The company is a leading domestic high-precision satellite navigation enterprise. It has achieved breakthroughs in downstream applications and overseas markets, and maintains a “buy” rating.

The company is a leading enterprise in the domestic high-precision satellite navigation and positioning industry. It has achieved breakthroughs in the fields of autonomous driving of agricultural machinery, autonomous driving of passenger vehicles, and geological hazard monitoring solutions. The company is developing overseas markets, and the overseas market space is broad and the company has obvious advantages. It is expected to continue to increase its global share along with the increase in the company's popularity and continuous enhancement of product strength, and gradually contribute more momentum to the company's performance growth. We estimate that the company's revenue from 2024 to 2026 will be 3.442 billion yuan, 4428 billion yuan, and 5.502 billion yuan, respectively, and net profit to mother will be 0.594 billion yuan, 0.77 billion yuan, and 964 million yuan respectively. The PE corresponding to the current market value is 28x, 22x, and 17x, respectively, giving a “buy” rating.

6. Risk warning: Demand in the construction and infrastructure sector has fallen short of expectations, and related business growth is declining; there are many competitors in downstream application fields such as disaster monitoring, autonomous driving of agricultural machinery, and autonomous driving of passenger vehicles. If competition intensifies in the future, the company's revenue growth rate or profitability may be affected; the company's passenger car autonomous driving business is currently progressing rapidly, but downstream demand is uncertain. If delivery volume falls short of expectations or product prices drop too fast, it may affect the company's performance; the current downstream demand for displacement monitoring business is mainly in the fields of geological disasters, water conservancy monitoring, etc. If future downstream customers If the procurement volume falls short of expectations for various reasons, it may cause the company's business revenue to grow poorly; overseas markets fall short of expectations. Overseas markets have been the company's focus in recent years, and there is some uncertainty. If the overseas market does not expand as expected, it may affect the company's future performance growth rate.