\u3000\u3000 Beijing Inhand Networks Technology Co.Ltd(688080) (688080)
Main points:
One core: Industrial Internet of things communication is the company’s traditional advantageous product.
The development plan for the deep integration of informatization and industrialization in the 14th five year plan proposes that the integration index of informatization and industrialization will reach 105 in 2025, which is significantly faster than that in the 13th five year plan. The digital transformation of various vertical industries is changing from the government call dominated by subsidies to market behavior dominated by demand such as cost reduction and efficiency improvement. Industrial communication is the only way for data cloud and digital transformation. IHS predicts that the global industrial communication market will reach US $5.53 billion in 2023, with a compound growth rate of 16%, and China’s growth rate is higher. As the company’s traditional advantageous products, industrial Internet of things communication series will benefit from domestic substitution and share of sea two wheel drive in the future.
One of the two applications: “the 14th five year plan” intelligent distribution network is the focus of investment, and the company iwos is expected to be large-scale.
The investment in distribution network during the 14th Five Year Plan period has a significant trend of informatization, intelligence and unmanned. Iwos is the core equipment of intelligent transformation of distribution network. Its importance to smart grid is similar to that of high-definition camera to smart city. By 2020, the total length of medium voltage overhead lines in the global distribution network has exceeded 16.8 million kilometers, with a potential market space of 40 billion yuan. The penetration rate of iwos in China may be less than 20%, with great growth potential. Beijing Inhand Networks Technology Co.Ltd(688080) master the core technology of distribution network monitoring and take the lead in China. Its AI analysis algorithm can accurately identify, locate, analyze and predict faults, with significant comprehensive advantages.
Two major applications: the rise of unmanned economy in the post epidemic era, and the growth potential of intelligent industrial computer is huge.
Global unmanned retail is in the ascendant. Kantar predicts that the scale of China’s unmanned retail market will reach 33.9 billion in 2020, with a compound growth rate of 68%, of which self-service vending machines are the mainstream of the market. Compared with overseas developed countries, the per capita ownership of self-service vending machines in China is low, and intelligent vending machines are in the stage of rapid popularization. Overseas, due to the background of aging population, expensive labor force and high rental cost, the stock market of self-service vending machines is huge, and there is a strong demand for intelligent transformation in the future. On the other hand, benefiting from the development of unmanned economy, various unmanned retail devices are blooming everywhere, and fashion beverage manufacturers accelerate the launch of intelligent freezers. Beijing Inhand Networks Technology Co.Ltd(688080) has been deeply engaged in the industry for many years, has complete solutions from equipment to operation, has a deep accumulation of agreement library, has rich experience in key customer service, and is expected to maintain a leading market share.
The growth logic is gradually clear: the technology accumulation is solid, the sales shortcomings are made up, and the performance is expected to be accumulated.
We believe that the company’s long-term alpha attribute comes from three aspects. First, the accumulation of industrial communication protocols and the understanding of the downstream fragmented market demand create a moat; Second, from high-end products to medium and low-end dimension reduction, the company has opened up market space. The company has gradually made up for its short selling board, and is expected to reach more SMB and overseas customers through direct selling + distribution + e-commerce; Third, the industrial Internet of things industry chain from end to cloud is self-developed, forming customer stickiness. The company has developed the iNOS industrial network operating system and various PAAS + SaaS cloud management platforms to provide customers with complete Internet of things solutions, and the user ecology has gradually formed.
Investment advice
As a specialized and new “little giant” in the field of industrial Internet of things communication, the company is expected to deeply benefit from the integration of industrialization and industrialization in the “14th five year plan” and share to the sea in the future. The two downstream applications of intelligent distribution network condition monitoring and self-service retail equipment industrial personal computers have broad market prospects. We expect the net profit attributable to the parent company from 2021 to 2023 to be 105 / 119 / 173 million yuan respectively, and the corresponding P / E ratio of the current stock price is 33.3 / 29.3 / 20.2 respectively. The company’s investment logic turned from the bottom of the performance to the high prosperity of the industry + the high growth of the company’s alpha performance. It was covered for the first time and given a “buy” rating.
Risk tips
The integration of industrial Internet and industrialization is not progressing as expected, the investment in intelligent distribution network is not as expected, and the expansion of overseas market is not as expected. The Sino US science and technology trade friction affects the stability of supply chain and overseas sales, and the mismatch between supply and demand in the chip industry affects the delivery of orders.
