Incident: On October 29, 2024, the company released its report for the third quarter of 2024. In the first three quarters of 2024, the company achieved revenue of 0.78 billion yuan, a year-on-year decrease of 11.59%; net profit to mother was 0.059 billion yuan, up 13.19% year on year; net profit without deducted back to mother was 0.038 billion yuan, up 64.84% year on year.

In 24Q3, the company's net profit after deduction increased dramatically, and profitability increased significantly. In the first three quarters of 2024, the company achieved operating income of 0.78 billion yuan (-11.59%), net profit of 0.059 billion yuan (+13.19%), and net profit of 0.038 billion yuan (+64.84%) after deducting non-return to mother. Looking at a single quarter, 24Q3 achieved revenue of 0.316 billion yuan (-3.27%), net profit to mother of 0.069 billion yuan (+75.05%), net profit of 0.061 billion yuan (+89.8%) after deduction, gross profit margin of 40.49% (+11.68pct), and a significant increase in profitability.

The core digital infrastructure and technology unit of Shenzhen's low-altitude economy participated in the country's first low-altitude intelligent integrated infrastructure construction project. The company is deeply involved in the construction of Shenzhen's low-altitude economy, covering the whole process of low-altitude economic planning, policy, industry, software and hardware design and integrated delivery. It undertook the preparation of the “Shenzhen Special Economic Zone Low Altitude Economy Industry Promotion Regulations” and introduced the country's first low-altitude economic regulations; participated in the preparation of various low-altitude economic plans, policies, standards and implementation plans in Shenzhen and various regions; carried out eVTOL take-off and landing site layout, route planning, test base planning, take-off and landing site construction standards and guidelines, and integrated flight rules and standards research. The company and the Guangdong-Hong Kong-Macao Greater Bay Area Digital Economy Research Institute (IDEA) jointly undertook the country's first low-altitude intelligent integrated infrastructure construction project (SILAS), mainly focusing on the development of the low-altitude economy in Shenzhen, developing a software platform that can cover the entire city, supporting low-altitude full-life cycle operation and management, and building supporting management centers, data centers and drone test sites, connected to typical urban scenarios, and software platform verification. It is expected that by 2025, it will support more than 3 million commercial flights per year in Shenzhen. 50ms On August 2, the SILAS Pioneer Edition was officially released, which is expected to greatly accelerate the development of Shenzhen's low-altitude economy.

Shenzhen's low-altitude construction plan is clear, and the company will make deep profits. On October 24, 2024, Shenzhen issued the “Shenzhen Comprehensive Three-dimensional Transportation Network Planning Plan (2024-2035)”, which clearly states:

In 2035, the output value of the city's low-altitude economy industry exceeded 200 billion yuan, and more than 1,000 low-altitude aircraft take-off and landing points were built. It has the ability to support more than 1,000 commercially operated low-altitude aircraft in the air at the same time and fly 0.01 million times a day. In 2035, a full-coverage, fast-response urban helicopter transportation service network will be fully built, and an infrastructure system supporting “heterogeneous, high-density, high-frequency, and high-complexity” low-altitude flight activities will be fully built. As of June 2024, 249 low-altitude take-off and landing sites have been built in Shenzhen, which is about to enter the high-speed construction period. As the core planning and construction unit for Shenzhen's low-altitude economy, the company will benefit deeply from Shenzhen's low-altitude infrastructure construction.

Profit forecast: The company is a leading domestic urban transportation overall solution provider and digital infrastructure provider in the low-altitude field. It is expected to fully benefit from the wave of low-altitude economic construction in Shenzhen and the trend of digitalization, autonomy, and intelligence of urban transportation systems. The company's 2024-2026 revenue is expected to be 1.672/2.086/2.593 billion yuan; net profit to mother is 0.197/0.28/0.366 billion yuan; and PE is 108/76/58X.

Risk warning: risk of macroeconomic fluctuations, risk of increased industry competition, risk of seasonal fluctuations in performance, etc.