Positioning leading companies with high precision. The company was founded in 2003 and is headquartered in Shanghai, and is deeply involved in the field of satellite navigation and positioning. Its main business includes high-precision GNSS receivers, measurement systems, geographic information systems (GIS), drone navigation, and autonomous driving. The company's products are mainly used in surveying and mapping, agriculture, construction, transportation, national defense and other industries. In 2023, the company's revenue and net profit to mother were 2.678 billion yuan and 0.449 billion yuan, respectively, up 19.77% and 24.32% year on year; 1H2024, the company's operating revenue/net profit to mother was 1.484 and 0.251 billion yuan respectively, up 22.86% and 42.96% year on year, respectively.

“+ Beidou” agriculture and infrastructure are growing steadily and are actively exploring the autonomous driving business. According to the European Union Space Program, the global GNSS market will grow from 260 billion euros in 2023 to around 580 billion euros in 2033, with a CAGR of 8.35%. In the Beidou industrial chain, the company is located in the middle and upper reaches, providing overall intelligent solutions and equipment for downstream customers. The company's products are mainly aimed at the fields of agriculture, forestry, infrastructure, surveying and mapping, and provide high-precision positioning equipment and intelligent solutions. With the help of Beidou Dongfeng, related businesses continued to grow steadily. The company has also been actively expanding in the field of autonomous driving in the past 3 years, obtained a series of automotive-grade product certifications, and the robot and autonomous driving business grew 61% year-on-year in 2023.

The low-altitude economy opened a second growth curve. According to data from CCID consultants, the overall scale of China's low-altitude economy in 2023 was 505.95 billion yuan, a year-on-year growth rate of 33.8%; it is expected that the low-altitude economy will exceed trillion yuan by 2026, reaching 1064.46 billion yuan. One of the main problems facing the development of the low-altitude economy in China is that it is difficult to maximize the use of low-altitude airspace resources. Currently, both drone supervision and business assurance place high demands on the accuracy of aircraft positioning and the perfection and accuracy of spatial information within the airspace. The company's accumulation of advantages in the two major technologies of high-precision positioning and spatial information collection has brought new growth potential.

Investment advice: The company's main business is steady, and Beidou and the low-altitude economy will open up a second growth curve for the company.

We expect the company to achieve operating income of 3.316, 4.211, and 5.344 billion yuan in 2024-2026, and achieve net profit of 0.574, 0.739, and 0.958 billion yuan. Corresponding PE is 28x, 21x, and 17x, which is covered for the first time, giving it an “increase in weight” rating.

Risk warning: market competition risk, exchange rate fluctuation risk, industry policy change risk, core technology change risk, restricted stock ban risk, global economic downturn risk, etc.