Established enterprises in the field of intelligent warehousing and logistics are determined to forge ahead and improve the information layout. The company is a leader in China's intelligent warehousing and logistics industry, with benchmarking projects in key areas such as automobiles, construction machinery, medicine, food and beverages, and customers include Daimler AG, Weimar Automobile, Volkswagen, Shanxi Fenjiu, Anhui Kouzi Liquor, Hengshui Laobaigan Wine and other well-known companies. In the past few years, the company's intelligent transportation system business has been under pressure due to the depressed investment in the automotive industry, but the company has ensured the continuous improvement of the company's overall revenue and profits through endogenous and epitaxial two-wheel drive. In 2017, the company acquired Changzhou Hayden and entered the overall solution field of automobile intelligent painting production line. Customers include Daimler Mercedes-Benz, Shanghai Volkswagen, Geely Automobile, Weima Automobile, Beijing Mercedes-Benz, Changan Ford and other well-known automobile manufacturers. With first-class technical strength and international competitiveness, complementary advantages are formed with the company's original products and market. With the attack of electric car tuyere, it is expected to make efforts in the field of smart car factory. From 2017 to 2019, Hayden exceeded its performance commitments. In August 2020, the company acquired 55% of CIMC Intelligence. Relying on CIMC Intelligence's rich experience in intelligent factories and intelligent logistics, the company is expected to improve the company's layout in the field of industrial Internet and increase the company's overall information solution capability. enhance the company's industry influence in the field of intelligent warehousing and logistics.

Intelligent warehousing and logistics equipment is in the ascendant, and the competition in the industry has entered a deepening stage. Benefiting from the rapid improvement of industrial and commercial logistics automation demand, China's intelligent warehousing logistics industry has maintained a trend of rapid development. From 2014 to 2019, the market scale of intelligent logistics equipment in China increased from 46.8 billion yuan to 140 billion yuan, with a compound annual growth rate of 24.50%. Among them, the market size of automated stereoscopic libraries increased from 10.1 billion yuan in 2014 to 26.9 billion yuan in 2019, with a compound annual growth rate of 21.64%; the market size of automatic transportation and sorting increased from 16.5 billion yuan in 2014 to 50 billion yuan in 2018, with a compound annual growth rate of 31.94%. At present, the number of automated stereoscopic repositories in China is more than 6000, which has great growth potential compared with the United States (more than 20,000), Japan (more than 38000), Germany (more than 10,000) and so on. In addition, after more than 10 years of development, China's intelligent warehousing logistics equipment industry has also entered a deepening stage, product upgrading trend overlay industry concentration trend is obvious, in the industry pattern reshaping process is expected to give birth to a new industry leader.

To bid for Dafu in Japan, the company is "both soft and hard" to move towards a new journey of growth. Over the past 10 years, Japan's Dafu, the global leader in intelligent warehousing and logistics equipment, has continued to maintain rapid development. From 2010 to 2019, Dafu's revenue increased from 9.67 billion yuan to 28.815 billion yuan, with a compound annual growth rate of 11.54%. The net profit of homing increased from 64 million yuan to 2.481 billion yuan, an increase of nearly 38 times in 10 years. With reference to the success of Dafu, we believe that the company has the potential to grow into a domestic intelligent logistics leader. (1) omni-directional layout of the core links such as Standard Tai Fook, the company's hardware and software. The company realizes self-supply in hardware equipment such as stacker, shuttle, hoist, pallet conveyor and AGV trolley, as well as software such as warehousing management system (WMS), equipment control system (WCS), enterprise management system (ERP). (2) start the journey of globalization for Standard Tai Fook. In Europe, the company supports Hayden to actively expand the European market and successively obtain customer orders such as Daimler AG and PSA; for Southeast Asia, it has set up subsidiaries and Sun Company in Malaysia and Thailand respectively, and continues to obtain large orders from customers such as Flemn; and (3) to Standard Tai Fook, actively expand downstream applications. The company has been engaged in intelligent logistics for more than 20 years, and has rich experience in automotive, construction machinery, medicine, food and beverage, e-commerce and other industries. the company is also actively developing industries with rapid outbreak potential, such as power lithium batteries and cold chain logistics, to create new sales growth poles.

Profit forecast and investment rating: without considering the additional issuance, we expect the company's net profit from 2020 to 2022 to be 94 million yuan, 145 million yuan and 201 million yuan respectively, the corresponding EPS is 0.35,0.53 yuan and 0.74 yuan per share, respectively, and the corresponding share price PE is 43 times, 28 times and 20 times respectively. Cover for the first time, giving the company a "buy" rating.

Stock price catalyst: the prosperity of manufacturing industries such as automobiles has improved; large orders have been signed in industries such as automobiles and food and beverages; and the synergy of mergers and acquisitions companies has been enhanced.

Risk factors: downstream demand is lower than expected; M & An integration is not as expected; industry competition is intensified.