Main points of investment:

Deeply ploughing the field of educational informatization and intelligence communication, the company was founded in 1997, the main business is to provide industry information products and solutions for education informatization (standardized test centers, intelligent classrooms), intelligent communication (video surveillance and integrated security), etc. Deep ploughing industry for more than 20 years, the company's products have been widely used, accumulated a large number of customer resources and rich project experience. In the field of educational information, the products cover more than 20 provinces and cities across the country, providing products and services for thousands of primary and secondary schools and hundreds of universities, and teaching and testing equipment has covered nearly 400,000 classrooms across the country; in the field of intelligent intercourse, the company has participated in the construction and transformation of rail traffic security and video surveillance systems in more than a dozen cities such as Beijing and Jinan, and has become a leading enterprise in subdivided fields. The company's revenue increased from 326 million yuan in 2016 to 601 million yuan in 2020, an increase of 84.07% in four years, and the corresponding attributable net profit also increased from 43.08 million yuan to 148 million yuan. the average annual compound growth rate is 36.12%. The revenue of Jie 2021Q1 is 137 million yuan (+ 365.45%), and the attributable net profit is 26.8125 million yuan (+ 301.24%).

Standardized test center leader, smart classroom hundreds of billions of yuan market open growth space standardized test center construction is one of the measures to ensure examination fairness and impartiality. In 2017, the national second round of standardized test site construction officially began, compared with the first round, in the horizontal and vertical dimension to bring volume and price rise: vertical product dimension From a single online inspection system to a platform (National Education examination Comprehensive Management platform) + N subsystems (online inspection system HD upgrade, identity authentication, cheating prevention and control, etc.), the investment in a single classroom has been increased from 2,000 yuan to 10,000 yuan. Horizontal examination type dimension: from college entrance examination, graduate examination to high school academic examination, high school examination and the expansion of various non-academic examinations, the number of examination rooms has increased. With the promotion of the new college entrance examination and the impact of the epidemic, we believe that there is still a market space of at least 8 billion yuan for standardized test sites.

The company has completed the construction and transformation of more than 400,000 standardized examination rooms, has high technical advantages and brand awareness, and is in a leading position in the industry.

With the promotion of the Education Informatization 2.0 Action Plan and the country's emphasis on undergraduate education, coupled with the catalysis of the suspension of classes and non-suspension during the epidemic, the demand for "Internet + Education" has soared. At the same time, as one of the new infrastructure for talent training and teaching evaluation, smart classrooms are facing unprecedented opportunities for industry development. We estimate that by 2025. The market space of intelligent classrooms in colleges and universities is as high as 180.3 billion yuan. The company has been leading the development of the multimedia classroom industry, and has provided products and services for more than 1000 primary and secondary schools and hundreds of universities. tens of thousands of multimedia classrooms have been built and renovated, and the intelligent classroom project of Guizhou University (53.97 million yuan) won the bid in 2020. It is expected to take the lead in benefiting from the rapid development of the intelligent classroom industry in colleges and universities by virtue of technology and project experience.

Smart rail transportation: benefit from the peak of urban rail construction, the business has grown steadily in recent years, the number of urban rail transit operating lines and mileage has increased year by year, and the rail transit industry has achieved rapid development, at the same time, it has also brought a large number of security demands. we estimate that the market space for the new construction and renovation of rail transit comprehensive security in the next two years is 642.448 billion yuan, totaling 8.848 billion yuan.

The company's intelligent rail transit solution goes deep into the business scene, combines subway operation requirements with public safety management, and is fully recognized by customers. it has provided professional video surveillance-based security products for rail traffic in more than a dozen cities such as Beijing, Xi'an and Hangzhou, and participated in the formulation of a number of technical standards. by virtue of technical advantages, the company's intelligent rail transit business has achieved rapid growth. Revenue increased from 96.65 million yuan in 2017 to 330 million yuan in 2019, with an average annual compound growth rate of 84.87 percent. Due to the impact of the epidemic, business declined in 2020, and we believe that with the recovery of the epidemic and the improvement of security standards, the demand for new and renovated sites will increase in the future, and the company's smart transportation business will grow steadily.

Profit forecast and investment rating: maintain the company's "overweight" rating. We are optimistic about the industry development prospects of education informatization and rail transit informatization, as well as the company's advantages in technology and project experience in the industry. It is estimated that the company's EPS in 2021-2023 will be 2.24,2.86,3.48 yuan respectively, and the corresponding share price PE will be 16,13,11 times, maintaining the company's "overweight" rating.

Risk hints: 1) the risk of intensified market competition; 2) the risk that the demand of the industry is lower than expected; 3) the risk that the company's order acquisition and execution is lower than expected; 4) the risk that the construction progress of standardized test sites is lower than expected; 5) the risk that the penetration rate of intelligent classroom is lower than expected; 6) the risk that the bidding progress of intelligent transportation is lower than expected; 7) the risk that the fund-raising project is lower than expected; 8) the risk of recurrent COVID-19 epidemic. 9) Macroeconomic downside risks.