Deeply involved in smart cities, smart transportation is the core business: Yinjiang Co., Ltd. is the first domestic company in the industry to propose a smart city concept and put it into practice. The company mainly builds data exchange and sharing platforms for users in the public security, traffic police, hospitals and other industries, and provides operation and maintenance and data operation services. We believe that the company is positioned as an urban brain operator service provider, using data accumulated by new technology analysis platforms such as cloud computing, big data, and artificial intelligence to support business collaboration and decision-making. According to the company's annual report, intelligent transportation business accounted for more than 40% of revenue in 2016 and showed an upward trend, accounting for 47.01% in 2019; smart cities accounted for 43.01% of revenue in 2016, showing an overall downward trend, accounting for 37.5% in 2019; and the medical informatization business's revenue share stabilized at around 14%. The intelligent transportation sector is the core business that the company focuses on developing. The company continuously integrates new technologies such as mobile computing, cloud computing, and intelligent recognition to build an advanced and intelligent transportation support system to provide first-class integrated solutions to meet the changing needs of customers.
From smart city builders to operating service providers: Starting in 2017, the company upgraded its business strategy to an “urban brain operator service provider” on the basis of continuing the “smart city construction and operation service provider” strategy.
We are deeply involved in big data and artificial intelligence technology, and innovatively apply them in the field of transportation. The Yinjiang Enloop big data platform and Enloop-Hub data exchange platform can standardize data in the transportation sector, opening up “physical channels”, “data channels”, and “service channels”. The newly developed HERO-global traffic AI control system can simultaneously handle road traffic control and optimization on a global scale, further enhancing the company's core competitiveness in the field of intelligent transportation.
With the urban brain as the main body, it continues to expand the smart transportation segment: as an urban brain operator service provider, the company's smart city brain construction and operation model has been deeply cultivated in major cities across the country, creating a green, intelligent and efficient “urban brain” tailored for Hangzhou, Shanghai, Nanchang, Shenyang, Fuzhou and other places. The company leverages its accumulated technical advantages in the field of intelligent transportation to lay out new business scenarios such as parking and travel, rail transit informatization, and high-speed traffic informatization. We believe that the company complies with the national development strategy and continuously enhances its core competitiveness in the field of major transportation. According to the 2020 semi-annual report disclosed by the company, the smart transportation business achieved revenue of 504 million yuan during the reporting period, accounting for 46.28% of total revenue.
Profit prediction and investment suggestions: We believe that the company has been deeply involved in the smart transportation field for more than 20 years, has introduced a series of smart products, solutions and applications, which have been fully recognized by the industry through practical applications. In the future, it will also continue to expand smart transportation segments and enhance data operation and service capabilities. We forecast that the company's revenue for 2020-2022 will be 2,889/28.74/3,575 billion yuan respectively, net profit of the mother will be 163/2.08/259 million yuan respectively, and the corresponding EPS will be 0.25/0.32/0.39 yuan respectively. Referring to comparable companies, the 2021 dynamic PE40-50 was given times. The corresponding reasonable market capitalization was 834 to 10.42 billion yuan, and the corresponding reasonable value range was 12.71-15.89 yuan/share, covering the “superior market” rating for the first time.
Risk warning: Smart transportation business expansion falls short of expectations.
