推荐逻辑一：软化程度深化提供超额毛利，星汉AI 大模型提效降本。软件增加值或为公司超额毛利润的主要来源，2022年，公司广义口径下软件业务收入比重为24.4%。2023 年10月，发布大华星汉大模型，提升算力利用率30%，提升算法准确率10%，降低开发成本30%。2024 年7 月，星汉大模型通过信通院可信AI 大模型标准符合性验证，目前已落地城市行业大模型与电力行业大模型。Company profile
The company is the world's leading smart IoT solution provider and operation service provider with video as the core. Supported by the two major technology strategies of AIoT and IoT digital intelligence platforms, it serves urban digital innovation and enterprise digital intelligence transformation. Through the evolution of product suppliers → engineering/services/operators → solution providers → AI solution providers, the company mainly stabilizes turnover/scale/profit through softening and AI.
Investment logic
Recommended logic 1: Deepening the degree of softening provides excessive gross profit, and the Xinghan AI model improves efficiency and reduces costs. The added value of software may be the main source of the company's excess gross profit. In 2022, the share of the company's software business revenue in the broad sense of the word was 24.4%. In October 2023, the Dahua Star Han University model was released, increasing the utilization rate of computing power by 30%, improving the accuracy of the algorithm by 10%, and reducing development costs by 30%. In July 2024, the Xinghan Big Model passed the certification of compliance with the Institute of Information and Communications Technology's Trusted AI Big Model Standard, and has now been implemented in the Urban Industry Model and the Electric Power Industry Model.
Recommended logic 2: China Mobile strategically invests 8.9% of the shares, and the DICT business is expected to contribute about 4.6-8.5% of revenue flexibility. In April 2023, China Mobile strategically took a stake and became the company's second-largest shareholder. The company and China Mobile business complement each other: the G-side solution provider+general integrator complement each other, the B-side is jointly expanding its reach to 3,000w+ government and enterprise customer groups, and the C-side is jointly building a smart home IoT ecosystem. According to our estimates, the incremental revenue from supporting procurement in the mobile DICT business from 24 to 26 years contributed about 4.6% to 8.5% (14.9 to 2.72 billion yuan) of the company's revenue in 23 years. If AI server cooperation between the two parties is taken into account, it is expected to further generate an annualized revenue increase of 1 billion dollars.
Recommended logic 3: The global market size is more than twice that of the Asia-Pacific region, and deepening the degree of overseas activity supports the optimization of the gross profit structure. In 2022, the global video surveillance market reached USD 48.7 billion, of which the Asia-Pacific region was approximately USD 22.05 billion. The company formulated a “going global” strategy in 2003 to enter the international market, and experienced marketing localization? Product/organization localization? Localization of the supply chain. 1H24's overseas business growth rate reached 9.1%, the revenue share exceeded 50% for the first time, and the gross margin reached 46.3%, higher than the domestic business 10.2 pcts. The increase in the share of overseas business is expected to continue to support gross margin optimization.
Profit forecasts, valuations, and ratings
The company's revenue for 2024-2026 is estimated to be 33.36/35.71/38.46 billion yuan, net profit to mother of 3.51/4.59/5.25 billion yuan, and EPS of 1.07/1.40/1.60 yuan respectively. Using the price-earnings ratio method, the company was given a 25-year, 14-times PE valuation, with a target price of 19.53 yuan/share. First coverage, giving a “buy” rating.
Risk warning
The risk that domestic macroeconomic recovery falls short of expectations; the risk of a tightening geopolitical environment; and the risk of exchange rate fluctuations.
