On December 6, 2024, the company released a record sheet of investor relations activities from October 29 to December 6, 24 to provide feedback on hot issues of concern to the market.

The demand for digital scenarios has emerged, significantly expanding business boundaries. The company's core positioning is AIoT. The first growth curve The security business is one of the business directions of the company's AIoT strategy; scene digitization is the second growth curve of the company's AIoT strategy. According to the case disclosed by the company's IR PPT, in different industries such as steel, new energy, and electricity, the average annual investment amount of enterprises in digital transformation is more than 2-10 times the investment in security.

The technical layout expands supply capacity, superimposes flexible production methods, penetrates into market channels, and responds to the digital transformation needs of thousands of downstream industries. The company cultivates various digital transformation products with rich sensing technology and AI and big data capabilities accumulated in the field of intelligent IoT. Take the fusion spectrum rapid coal quality analyzer recently launched by the company United Nations Energy Group as an example. The instrument can analyze organic and inorganic components in coal through multi-dimensional sensing, bimodal neural network algorithms, AI models, etc., detect key indicators such as calorific value, moisture, ash, and sulfur content of coal, and complete sampling coal quality analysis within 2 minutes. The project was launched in July 2022. After many rounds of product iterations and updates, the third-generation product was launched in October of this year. It is expected to generate hundreds of millions of dollars in revenue this year. Judging from the commercial value, the instrument can currently be used in scenarios such as coal mines, ports, thermal power plants, coal chemical plants, etc. In the future, it can be expanded to various long-tail processes such as coal production, optimizing the ratio of coal production, and improving the quality of coal combustion. In the next few years, the company initially expects the market space for this product to reach several billion yuan or even higher.

In a demand-side procyclical context, expectations of cost reduction and efficiency have led to performance flexibility. In terms of the main domestic business, the speed of issuance of special bonds has accelerated, and the overall performance of PBG's various sub-industries is directly related; EBG's digital demand to reduce costs and increase efficiency is active; after SMBG's overall industry inventory is reduced, it will increase the flexibility of business development; overseas emerging markets have good development potential, non-video businesses are growing faster, and the share of project sales is increasing (currently 20-30%); innovative businesses continue to receive resource incentives and have great potential for development. The company's internal optimization and cost control work continues to form a better balance between input and output. If a package of domestic policies is gradually implemented, the revenue side growth rate is expected to pick up, and performance is expected to be flexible next year.

Profit forecasting, valuation and ratings

Based on the three-quarter report and expectations of future domestic market demand recovery, we adjusted the company's 24-26 revenue forecast to 93.87/104.8/118.57 billion yuan, up 5.1%/11.6%/13.1% year on year; forecast net profit to mother of 13.21/16.14/19.29 billion yuan, up -6.40%/22.24%/19.53% year on year, corresponding to 21.4X/17.5X/14.7X PE, respectively, maintaining the “buy” rating.

Risk Alerts

Domestic macroeconomic recovery falls short of expectations; the geopolitical environment is tightening; and there is a risk of exchange rate fluctuations.