Incident: The company released its 2024 mid-year report. In the first half of 2024, the company achieved operating income of 1.484 billion yuan, an increase of 22.86% year on year; realized net profit of 0.251 billion yuan, an increase of 42.96% year on year; deducted non-net profit of 0.211 billion yuan, an increase of 34.55% year on year.

The performance was in line with expectations and was close to the upper limit of the previous forecast value (forecasted net profit of 0.243-0.253 billion, actual 0.251 billion).

The company's revenue was steady in the first half of the year, and net profit to mother increased significantly, laying the foundation for achieving the profit growth target of 25% in 2024.

24H1's gross margin was 58.4%, and the net profit margin was 16.5% (up 2.3 pct year over year). In addition, the company generated an investment income of about 35 million in the first half of the year, mainly investment income from the company's disposal of long-term equity investments.

The growth rate of the four major business segments is divided, and there is a high increase in resources and utilities. According to the company report (same below), the revenue and growth rates of the company's four major business segments in 2024H1 are: construction and infrastructure 0.533 billion (yoy +4.6%); geospatial information 0.191 billion (yoy +7.5%); resources and utilities 0.681 billion (yoy +48.1%); and robotics and autonomous driving 0.079 billion (yoy +29.8%), respectively.

Overseas business continues to grow, and there are highlights in promoting intelligent driving+low-altitude business. In the first half of '24, the company's foreign revenue was 0.445 billion yuan, accounting for 30% of revenue, up 35% year-on-year, and maintained steady and rapid growth. Furthermore, according to the company's investor questions and reports, the company has now reached a cooperation with Baidu and is the exclusive supplier of Baidu Radish Express sixth-generation unmanned vehicle P-Box products. In terms of low-altitude economy business, the company's 3D intelligent products can be used in fields such as the construction of digital platforms for smart city spaces, emergency monitoring, and power inspection.

It is recommended to continue to pay attention: (1) Focus on the company's overseas business expansion. Going overseas will become an important driving force in the next growth curve. It is expected that the share of overseas revenue will continue to increase; (2) market opportunities for long-term software subscription fees. The company has 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 has achieved a deep integration of “same origin in the cloud” and “hardware device+software account service” to enhance the user experience of terminal products.

The 24-year profit forecast was raised, the 25-26 profit forecast was maintained, and the “buy” rating was maintained. Due to the company's high non-current profit and loss in the first half of '24 (profit and loss from disposal of major illiquid assets), the 24-year profit forecast was only slightly raised, and the net profit forecast for 25-26 is estimated to be 0.583/0.72/0.904 billion yuan for 24-26 (0.567/0.72/0.904 billion yuan before adjustment). The PE corresponding to the current stock price is 26/21/17 times. The company's business progress is steady, and the valuation is at a low historical level, maintaining a “buy” rating.

Risk warning: upstream raw material supply risk; exchange risk; risk of changes in hardware product demand due to the differentiation of intelligent automobile routes.