Xiongdi Technology is the world's leading provider of trusted digital identity products and services. It focuses on providing identification and management solutions for government, institutional and enterprise users: the company provides system platform construction and software development services in various technical fields such as physical anti-counterfeiting, digital security, and biometrics, and has comprehensive service capabilities. Its business mainly revolves around identity information management, and is subdivided into two major sectors: smart government and smart transportation. In the field of smart government, the company provides full-process solutions, including system software, intelligent equipment and terminal hardware, and continues to expand into smart public services. In terms of smart transportation, the company relies on radio frequency identification technology, combined with big data, AI, Internet of Things and other technologies to provide information-based solutions for travel scenarios. Currently, the company's revenue and profit growth rate has both rebounded, domestic growth has returned to rapid growth, and overseas layout is gradually improving.

Platform capabilities, technological innovation and first-mover advantage build a moat in the field of production of trusted identity documents for companies: the uniqueness of identity forms the foundation of trust in modern society and provides a solid foundation and guarantee for key industries. This trust system is implemented through the digital identity authentication value chain, covering various aspects such as information collection, data services, document production, issuance and verification. Xiongdi Technology focuses on front-end identity information collection, back-end document production and issuance, and identity verification, and the industry has a high competitive threshold. The company has equipment automation, digital intelligence, software and platform capabilities in the field of security document production and issuance. MLP, a multi-personalized anti-counterfeiting process, has become one of the core technologies for passport security. Coupled with the exclusivity of the certification industry and the company's first-mover advantage as the only Chinese enterprise in the ICAO ICAO MRTD equipment supplier list for machine-readable travel documents, Xiongdi Technology has built a solid moat in the field of trusted identity security document production.

Xiongdi Technology has successfully implemented trusted identity projects in more than 50 overseas countries and regions. In particular, it has made significant progress in the African market. Overseas business advantages are obvious: Asian and African countries are increasingly demanding trusted identity documents due to elections and national identity management requirements, but these countries generally lack certification capabilities, so there is an urgent need to seek technical support and cooperation from outside. As a leading enterprise in the domestic safety certification industry, Xiongdi Technology has provided identification-related services to many countries and regions along the “Belt and Road”. The company successfully delivered a national election project in Nigeria, issued Africa's first e-passport using the MLP process in Burkina Faso, and won bids for e-passport/e-ID card projects in several countries. Xiongdi Technology's overseas business has been developing for more than ten years, covering more than 50 countries and regions, and its overseas business advantages are obvious.

Profit prediction and investment rating: As a leading integrated identity information service provider in China, Xiongdi Technology is deeply involved in the development and production of identity authentication solutions, and has built a comprehensive ecosystem from algorithm design to software and hardware integration. Its business reach has been extended widely to various application fields such as smart government and smart transportation, and the sales situation of various business segments abroad is expected to improve further in the future. We expect the company's net profit to be 0.02/0.124/0.184 billion yuan in 2024-2026, respectively, and the corresponding PE is 177/28/19 times, respectively, covered for the first time, and given a “buy” rating.

Risk warning: 1) Overseas business expansion risk; 2) risk of declining gross margin; 3) technical risk; 4) risk of bad debts in accounts receivable.