The company's products are mainly divided into four major series: monitoring product line, operation management product line, signal infrastructure equipment product line, integrated operation and maintenance equipment product line; monitoring products account for the highest share of the company's revenue. In 2023, monitoring product revenue accounted for 72.79% of the company's revenue, followed by signal infrastructure equipment products, accounting for 10.36% of the company's revenue. The company's main customers are railway administration group companies under China Railway Group, local urban rail transit companies, and large enterprises that build their own railways. The company's shareholding structure is scattered, and Chairman Li Haiying is the largest shareholder.

The railway investment boom is picking up, and the company's railway information-related products will benefit. In 2023, the national railway completed fixed asset investment of 764.5 billion yuan. In the first half of 2024, the national railway completed fixed asset investment of 337.3 billion yuan, an increase of 10.6% over the previous year, a record high for the same period. Thus, it is predicted that the national railway will complete fixed asset investment of 845.5 billion yuan this year. The company's products such as centralized railway signal monitoring systems, railway disaster prevention and safety monitoring systems, earthquake monitoring and early warning systems, electricity safety production command systems, and contact network water washing trucks have an advantageous position in terms of technology, standard influence and brand promotion. The company has a broad line of railway information technology products and has a first-mover advantage. The recovery of the railway industry will bring great flexibility to the company's performance.

An established manufacturer of surveillance products, intelligent control of line safety and environment has a first-mover advantage. Intelligent control of line safety and environment will benefit from the recovery of railway informatization boom, with a market space of nearly 8 billion. In 2023, the company carried out key tasks such as the development and industry testing of intelligent analysis algorithms for line safety and environmental control platforms. The line safety environment video intelligent analysis system developed by the company helped inspectors discover route hazards such as falling rocks, people, and large animals through video analysis. At the end of 2023, the company completed system design and development, and passed tests by industry organizations.

The company's comprehensive urban rail monitoring products already have all core capabilities and have location advantages in Henan, and the subway tunnel cleaning truck series products are at the leading level in China. It is estimated that in the next few years, the market for comprehensive urban rail monitoring products in Zhengzhou will be about 2 billion yuan. The company's integrated urban rail transit monitoring system won the bid for a total of 17 urban rail lines, with a line length of 507.32 kilometers. By the end of 2023, 14, 398.9 kilometers of urban rail lines had been opened, with a total of 281 stations and 15 line center systems.

Profit forecast: Huihuang Technology's net profit forecast for 2024-2026 is 0.31, 0.382, and 0.507 billion yuan, respectively, and will increase by 88.27%, 23.31%, and 32.97% respectively in 2024-2026, giving it a “buy” rating.

Risk warning: The development of railways and urban rail lines fell short of expectations, and the company's business progress, profit forecast and valuation fell short of expectations.