Key points of investment

The first three quarters of 2024 achieved revenue of 2.007 billion yuan, +43.44% YoY, net profit to mother 0.146 billion yuan, +41.27% YoY, after deducting non-net profit of 0.07 billion yuan, +24.94% YoY. Among them, Q3 revenue for a single quarter was 0.903 billion yuan, +33.29% YoY, net profit to mother 0.082 billion yuan, +21.07% YoY, after deducting non-net profit of 0.065 billion yuan, +45.16% YoY.

Revenue growth was high, net profit growth rate increased in Q3, and net operating cash flow corrected in the first three quarters of 2024. The company's revenue grew rapidly, mainly due to the company seizing development opportunities in the aerospace information industry, fully exploiting customer needs, and increasing on-hand orders. The net cash flow from 2024Q3's operating activities was 0.016 billion yuan, a year-on-year correction. The company continuously strengthened repayment management and strengthened collection efforts.

The year-on-year growth rate of 2024Q3 deducted non-net profit was 45.16%, 2024Q1 deducted non-net profit as a loss, and 2024Q2 deducted non-net profit fell 4.72% year on year. Compared with the first half of the year, the growth rate of Q3 deducted non-net profit increased markedly.

From the perspective of costs and expenses, the gross margin of 2024Q3 was 46.86%, +1.12cpt compared to the previous year, with a significant increase in gross margin. Sales/management/R&D expenses were 6.81%/8.94%/13.49%, -0.10pct/+1.53pct/-1.88pct, respectively.

Build a “Starmap Cloud” for sky information, enable the second growth curve to launch the Starmap Cloud developer platform, and use the cloud platform as the core to build a “Starmap Cloud” for sky information. The Starmap Cloud Developer Platform is an online developer application resource portal. It has continuous integration capabilities covering the world's multi-element geographic information data, digital Earth core algorithms, and full link integration to provide infrastructure for developers. Relying on the “Star Map Cloud” developer platform, using the “2D2C” model to further open up space information value channels by serving a wide range of space information developers, form a “sky information cloud”, and continue to empower the company's second growth curve through data migration, computing to the cloud, and application to the cloud.

Lay out the entire commercial aerospace industry chain and seize low-altitude economic opportunities

Based on our core business, we use digital earth technology as a starting point to lay out new productivity tracks such as commercial aerospace and low-altitude economy. 1) In May 2024, the overall design of the first “4+2” commercial aerospace industry chain layout was completed, and the development support capacity of the entire commercial aerospace industry chain of Zhongke Xingtu was built, and the layout was planned and laid out in the fields of commercial constellation construction, commercial satellite measurement and operation control, and aerospace information application services, and a strategic transition to the entire commercial aerospace industry chain. 2) The company began deploying in the low-altitude economy sector in 2020, and has developed a clear competitive advantage in this field.

In July 2024, the GEOVIS digital low-altitude brain was released to provide common capabilities such as airspace planning, route planning, geo-fencing, flight status, flight warning, and risk assessment for low-altitude traffic services.

Profit forecasting and valuation

We expect the company's revenue for 2024-2026 to be 3.642/5.16/7.203 billion yuan (+44.76%/41.70%/39.59%), net profit to mother 0.482/0.694/0.958 billion yuan (YoY +43.98%/38.02%), EPS of 0.89/1.28/1.76 yuan, maintaining the “buy” rating.

Risk warning

Risks such as orders from major downstream customers falling short of expectations, low altitude economic policies and orders falling short of expectations, technological progress falling short of expectations, and increased competition.