occurrences

On August 28, 2024, the company released its 2024 semi-annual report. 24H1 achieved revenue of 0.637 billion (YoY +21.0%) and realized net profit of 0.005 billion (YoY -56.5%), of which 24Q2 achieved revenue of 0.393 billion (+12.1% YoY, +60.4% YoY), and achieved net profit of 0.01 billion yuan (YoY -46.9%).

The revenue side continued to grow, turning a loss into a profit in the second quarter. The company achieved 24H1 revenue of 0.637 billion, a year-on-year increase of 21%, and a return of 0.005 billion yuan, a year-on-year decrease of 56.5%. Of these, 24Q2 achieved revenue of 0.393 billion, +12.1% year-on-year, +60.4% month-on-month, and achieved a return of 0.01 billion yuan to mother, turning a loss into a profit.

The increase in revenue from the 24H1 urban road transport business led to overall revenue growth.

High investment in continuous research and development, and the core technology is autonomous and controllable. 24H1's R&D expenses were 0.068 billion yuan, an increase of 14% year over year. During the reporting period, the company had 3 national scientific research projects/projects, 2 provincial scientific research projects/topics, and 2 municipal scientific research projects/topics. 12 new patents and 39 software copyrights were added. The company strengthens breakthroughs in key technologies, accelerates research and development of new localized replacement products, and achieves self-control of core technology.

Gross margin has fluctuated, and results are expected to be released in the second half of the year. The company's 24H1 gross profit margin was 21.9%, -8.3 pct year on year, 22.0% gross profit margin for Q2, and -10.6 pct year on year. The company's gross margin fluctuated mainly due to large differences in gross margin between projects, and projects with large revenue scales had a great impact on current gross margin. Since the company mainly invested in project design and development in the first half of the year, most projects will be accepted in the second half of the year. The seasonality of main business revenue is quite obvious, and results are expected to be released in the second half of the year.

Launched the low-altitude “Tianmu” series of products to promote the implementation of benchmark projects. The company focuses on accelerating the development of low-altitude “Tianmu” series products around the flight management platform, forming strategic cooperation with more than 20 provinces and cities, including Beijing, Shanghai, Chongqing, Jiangsu, Anhui, Guangzhou, Nanjing, Suzhou, and Zhuhai, to promote the implementation of benchmark projects and empower the low-altitude flight service guarantee system, which is expected to benefit from the low-altitude economy.

Profit Forecasts, Valuations, and Ratings

The company's civil aviation management business is developing steadily, and the low-altitude economy has given it a second growth curve. The company is expected to achieve net profit of 0.16 billion/0.2 billion/0.25 billion yuan in 2024-2026, +21%/+25% over the same period, corresponding PE of 49/39/31 times, maintaining an “increase” rating.

Risk warning

The development of the civil aviation management business fell short of expectations; the progress of low-altitude construction fell short of expectations; competition in the industry intensified; and the turnover of accounts receivable and accounts payable was risky.