In the first three quarters of 2023, the Company realized operating income of RMB 675 million yuan, with a year-on-year growth of 8.21%, among which the operating income in the third quarter was RMB 258 million yuan, with a year-on-year growth of 17.27%. In the first three quarters of 2023, the Company realized a net profit of RMB 33 million yuan, an increase of 32.41% over the same period of last year, among which the net profit of RMB 7 million yuan was realized in the third quarter, with a year-on-year growth of 30.92%. In the first three quarters of 2023, the comprehensive gross profit margin of the Company was 40.99%, and the sales expense ratio, management expense ratio and R & D expense ratio were 12.26%, 11.14% and 12.94% respectively. In the first three quarters of 2023, the Company's contract liabilities amounted to RMB 58 million, with a year-on-year growth of 65%.

In September 2023, China Railway Group issued Digital Railway Planning, proposing that by 2035, digital railway construction should achieve great achievements, railway digitalization transformation should be completed in an all-round way, and the intelligence degree of railway business fields should be improved in an all-round way. In October 2023, the Ministry of Industry and Information Technology approved the test frequency of railway new generation mobile communication system (5G-R) based on 5G technology to China Railway Group.

5G-R system mainly carries the future railway, especially the railway core services such as high-speed railway train control, command and dispatching communications, which is the key infrastructure to ensure the safety and smoothness of railway operation.

Based on years of technology accumulation of railway dedicated communication, the Company has taken the lead in layout and pre-research for multi-service scenarios such as command and dispatch, intelligence and digitalization around 5G-R. At present, the company has completed the research and development of command and dispatching-related products and solutions based on 5G-R, and has laid out many core products and solutions for intelligent and digital empowerment of the industry in advance, making sufficient preparations for the arrival of the 5G-R era.

[investment advice]

After the 5G-R test frequency is issued, the company will accelerate the R & D and application of relevant products. The issuance of 5G-R test frequency will actively promote the application research of railway 5G technology, the construction of 5G-R system scheme and the development of key equipment, lay a foundation for the company to accelerate the R & D and application of 5G-R related products and solutions, expand more industrial application scenarios in the era of Internet of Everything, and bring greater market opportunities and broader market space. In the future, it is expected that the company will consolidate the digital base and assist the intelligent and digital construction of railways.

Jiaxun Feihong has actively innovated in the formulation and application research of 5G-R standards, and has participated in the formulation and preparation of a number of industry standards and application white papers. In August 2023, under the guidance of the State Railway Administration and National Railway Group, relying on the key Laboratory of Broadband Mobile Information and Communication Railway Industry and led by Jiaxun Feihong Intelligence Research Institute, the "White Paper on the Application of Railway 5G-R Visual Technology" jointly compiled by Beijing Jiaotong University, Railway fourth Academy, ZTE, Guangzhou Railway Group and Liujie Science and Technology was officially released. Focusing on the future intelligent development direction and goal of China's railway communications, the research on related technologies and applications has been carried out to jointly promote the technological innovation and industry application of railway 5G-R.

The company is a comprehensive solution provider for intelligent command and dispatch of the whole industry chain. Over the years, Jiaxun Feihong has taken command and dispatch as its core business scenario, relying on the new ICT technology of "Great Intelligence Moving Cloud", keeping pace with the evolution of information and communication technology in the industry, and providing many core products and intelligent solutions for the digital and intelligent transformation of the industry. We have adjusted the profit forecast for 2023-2025. It is estimated that the company will achieve revenue of 12.82/15.24/18.16 billion yuan from 2023 to 2025, net profit attributable to parent of 0.85/1.33/1.87 million yuan, corresponding PE of 54.23/34.80/24.91 times, maintaining the rating of "overweight".