Key points of investment

Next Tuesday (September 10), there will be an inquiry on the “Joint Information” for a new stock on the Science and Technology Innovation Board.

Integrated Information (688615.SH): The company provides related products and services for C-side and B-side users based on core technologies such as intelligent text recognition, image processing, NLP, and knowledge maps. The company achieved operating income of 0.806 billion yuan/0.988 billion/ 1.187 billion yuan respectively, with YOY of 39.35%/22.67%/20.04%; realized net profit to mother of 0.144 billion/ 0.284 billion yuan/0.323 billion yuan, and YOY of 11.54%/96.37%/13.91% in that order. In the latest reporting period, 2024H1 achieved operating income of 0.688 billion yuan, an increase of 21.85% over the previous year, and realized net profit of 0.221 billion yuan to mother, an increase of 18.15% over the previous year. From January to September 2024, the company expects to achieve an 18% to 25% year-on-year increase in operating income and a 5% to 7% year-on-year increase in net profit to mother.

Investment highlights: 1. The company's C-side Scanning Omnipotent and Business Card Omnipotent apps have established a leading position among similar products in the world; the relatively stable demand for renewal of existing users is expected to increase in user payment rates in some regional markets, or drive a steady increase in the company's C-side revenue. The actual controller of the company, Zhen Lixin, and other team members were originally employees of the Motorola China Research Institute. During their tenure, they developed handwriting recognition systems and voice recognition technology. Their superior technical advantages in the field of text recognition combined the company's early entry into the C-end text recognition app market. The two text recognition apps, Scanning Omnipotent King and Business Card Omnipotent King, have achieved leading positions in similar products; in 2023, the average monthly activity of Scanning King Almighty was 0.145 billion, and the average monthly activity of Business Card King was 0.801 million, which is definitely second place compared to similar products Disparities (0.066 billion and 698,000, respectively). The good development of the above two apps is expected to drive a steady increase in the company's C-side revenue. On the one hand, the renewal rate for Scanning Almighty King users is basically stable, and the renewal rate for business cards is increasing, which is expected to support a stable revenue base; on the other hand, there is plenty of room for growth in new users and new paid conversion rates in many overseas markets such as Brazil, Indonesia, and Mexico, which is expected to increase revenue. 2. To B companies have established a certain competitive advantage in the financial industry; new solution products combined with AI have established benchmark customers in the financial field, and are expected to rely on this field to further explore B-side growth space. The company provides intelligent text recognition services (to help companies collect and enter information on documents such as licenses, contracts, and bills) and commercial big data services (to discover hidden enterprise relationships through NLP and other related technologies to achieve functions such as due diligence and risk monitoring), and provides various products such as basic technical services, standardized services and solutions for large, medium, and small enterprises. Compared to other industries, the financial industry has accumulated a large amount of data and high demand for risk control, etc., so the company is deeply involved in the financial industry and has achieved certain results. During the reporting period, the financial industry's customer revenue share remained at the top of the B-side. It has covered 6 major state-owned commercial banks, the head offices or branches of 12 national joint-stock commercial banks, and the top ten customers with total assets in the securities industry. Using the financial sector as an entry point, the company is expected to gradually expand new solution products developed in conjunction with AI; currently, products such as intelligent text recognition AI robots and AI training platforms have set benchmark customers in banking, securities and other fields, including Everbright Group, China Insurance, GF Securities, and Chongqing Agricultural Commercial Bank, which are expected to further explore B-side business development space based on the financial sector.

Comparison of listed companies in the same industry: The company is mainly engaged in intelligent text recognition and commercial big data business. Considering factors such as the industry, business scale, product type, and scope of service, the comparable company chose Jinshan Office and Foxit Software, the office software and service providers that provide C-side products and B-side services. Looking at the comparable companies mentioned above, the average revenue scale of the 24H1 industry is 1.375 billion yuan, the comparable PE-TTM (excluding outliers and arithmetic average) is 54.54X, and the gross sales margin is 89.62%; in comparison, the company's revenue scale and gross sales margin are lower than the industry average.

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