The company has made another breakthrough in the relay ZTE IoT, and its business performance is expected to be "V"-shaped reversal of the former ZTE IoT (formerly ZTE IoT) since 2003. In 2016, Gao Xinxing Group issued shares and spent 100 million cash to acquire Shenzhen Zhongxing Wulian Technology Co., Ltd. after the acquisition, it changed its name to Gao Xinxing Wulian and became a subsidiary of Gao Xinxing Group. The subsidiary is engaged in vehicle networking module and terminal business, and has obtained 43 patents related to vehicle networking terminal products. Its agreement is well adapted to more than 7000 models, and it is the first domestic manufacturer of vehicle specification-level modules. In 2019 and 2020, Gao Xinxing was affected by the ZTE Corporation incident in the United States, as well as the expiration of acquisition bets, Sino-US trade friction, COVID-19 epidemic and other factors, performance declined and the group's goodwill impaired; at present, through the adjustment of management team and organizational structure, Gao Xinxing has gradually made breakthroughs in research and development, market and supply chain, which has greatly improved the prosperity of the beneficiary industry, which is expected to lead to a "V" reversal in business performance, and Gaoxing has entered a period of fruitful harvest. We maintain the forecast that Gao Xinxing 2021 Universe 2022 Universe will achieve a net profit of 0.94 million 2.17 / 334 million yuan in 2023, with an increase of 108.6%, 129.8%, 54.1%, 0.12 and 0.19 yuan, respectively, and the current stock price corresponds to a PE of 43.5, 28.3 times, respectively, maintaining the "overweight" rating.
The technological environment of the Internet of things is becoming more and more mature, the industry is prosperous, the company's competitive strength is prominent, and the performance is expected to improve marginally. The standards of the Internet of things have been basically implemented. The Ministry of Industry and Information Technology has put forward suggestions to standardize the development direction of the Internet-connected automobile safety technology framework. Various localities have issued policies to establish a test vehicle network demonstration zone, and the industry has landed in full swing. Hongmeng system is widely used, 700m base station reconstructs 5G environment, and the low-delay wireless network with wide coverage and strong penetration will accelerate the further expansion of vehicle networking. According to IDC data, the market size of the Internet of things in China is expected to reach 1.8 trillion yuan in 2025, with a compound growth rate of more than 13% and a high degree of prosperity in the industry.
Gao Xinxing IoT V2X module has obvious technical advantages, and the vehicle gauge-level module has millions of matching experience; Tbox products have been applied in domestic large vehicle manufacturers such as Geely Automobile, Changan Automobile, BYD and well-known Tier1 suppliers; OBD products have served the global 20 + operators and achieved self-adaptive adaptation of more than 14000 models worldwide with other afterloading products. The core competitive strength of the high and emerging Internet of things is prominent, among which the module currently has the third market share, which is expected to benefit from the high prosperity of the Internet of things industry to promote marginal improvement of performance.
Risk tips: Internet of things development is not as expected risk; goodwill impairment risk; policy risk.