Incidents. On August 7, the company released its 2024 semi-annual report. In the first half of 2024, the company achieved operating income of 1.484 billion yuan, a year-on-year increase of 22.86%; realized net profit of 0.251 billion yuan, a year-on-year increase of 42.96%; and realized net profit of 0.211 billion yuan after deduction, an increase of 34.55% over the previous year.

Adhering to high-precision navigation and positioning technology as the core, multiple sectors work together to help the company's performance grow steadily. The company is deeply involved in high-precision positioning technology and continuously enriching industry application scenarios. With high-precision navigation and positioning technology as the core, the company relies on high-precision chip positioning platforms and global Starnet integrated network platforms to enhance downstream applications in multiple industries and promote steady growth in the company's performance. In the first half of 2024, the company achieved revenue of 1.484 billion yuan, a year-on-year increase of 22.86%; achieved net profit of 0.251 billion yuan, a year-on-year increase of 42.96%; realized net profit after deduction of 0.211 billion yuan, an increase of 34.55%; of these, 2024Q2 achieved operating income of 0.867 billion yuan in a single quarter, an increase of 24.57% year-on-year and 40.57% month-on-month; achieved net profit of 0.148 billion yuan year-on-year, year-on-year increase Up 53.28%, up 43.77% month-on-month.

In the first half of 2024, the company's gross sales margin and net sales margin were 58.44% and 16.5% respectively, both of which remained relatively stable. Looking at various business segments, the resources and utilities, construction and infrastructure sectors, as the company's main revenue contributors, achieved revenue of 0.681 billion yuan and 0.533 billion yuan, an increase of 48.06%/4.62% year on year; the geospatial information sector achieved revenue of 0.191 billion yuan, an increase of 7.48% year on year; and the robot and driverless car sector achieved revenue of 0.079 billion yuan, an increase of 29.8% year on year.

Adhere to investment in R&D and innovation, and continuously achieve technological and business breakthroughs. The 2024H1 company incurred R&D expenses of 0.242 billion yuan, an increase of 31.28% over the previous year, and the R&D expenditure rate reached 16.33%. The company has maintained a high investment in R&D for a long time, focusing on core basic components such as GNSS chips, OEM boards, and antennas, further enhancing core technical advantages such as high-precision GNSS algorithms, integrated navigation, SWAS wide-area enhancement, and precise track positioning. At the same time, the company continues to strengthen its business development efforts in the application sectors of the four major industries, and continues to enhance the company's market competitiveness. In the resources and utilities sector, the company has developed deformation monitoring system solutions for applications in different industries based on the Internet of Things+Beidou's high-precision positioning technology. It can obtain 3D deformation and other sensing data of monitored objects around the clock, and is widely used in fields such as geological disasters, mine safety, traffic slope monitoring, water conservancy and hydropower monitoring, emergency monitoring, and building deformation monitoring.

In the construction and infrastructure sector, the company continues to promote high-precision receiver intelligent equipment such as “video measurement RTK”, and 24H1 sales have achieved steady growth. At the same time, the company continues to expand the international market for digital construction products, and guidance and control systems for bulldozers, graders, excavators, etc. have been applied in more than 30 countries around the world. In the geospatial information sector, based on high-precision GNSS+INS+ lidar+unmanned flight control technology, the company can provide comprehensive solutions including navigation and positioning modules, high-precision account services, etc.; at the same time, the company's Huawei 3 and Huawei 6 unmanned ships participated in the 38th and 39th Antarctic research expeditions, and the Huawei 3 unmanned ship also participated in the second Qinghai-Tibet scientific research project. The measured underwater topographic data provided high-precision data support for Antarctic glaciers and plateau glacier research projects to assist decision-making. In the robotics and autonomous driving sector, the company has reached cooperation with companies such as Easy Control, Sany, and XCMG in the fields of low-speed robots, mining vehicles, ports, logistics autonomous driving, etc.; in the passenger car autonomous driving business, the company has been designated as a designated supplier for autonomous driving position unit business for many car companies, and some fixed-point models have already been mass-produced1. In the first half of 2024, the company reached cooperation with Baidu and Xiaomi, and is currently the exclusive supplier 2 of P-box products for Radish Express sixth-generation unmanned vehicles and IMU-BOX products for Xiaomi SU7 series products. We believe that with the rapid development of new technologies such as 5G and cloud computing and the completion of Beidou's third-generation global networking, the company continues to expand its layout in various industries with high-precision positioning technology as the core, and future performance is expected to maintain steady growth.

Profit forecasting and investment ratings. We predict that the company's net profit for 2024-2026 will be 0.567/0.676/0.868 billion yuan, and EPS for 2024-2026 will be 1.04/1.24/1.59 yuan, respectively. The current stock price is 28/23/18 times PE, respectively. Given that the company is a leading domestic high-precision satellite navigation company and continuous breakthroughs in the industry application sector, future performance is expected to achieve rapid growth and maintain a “buy” rating.

Risk warning: Market competition increases risk; risk of new technology research and development falling short of expectations; risk of loss of core technical personnel; management of internal control risks.