\u3000\u3 China Vanke Co.Ltd(000002) 405 Navinfo Co.Ltd(002405) )
Core view
The electronic navigation business started and has formed a five in one business layout: the company has continued to cultivate electronic navigation for many years, accounting for about 40% of the market in the field of vehicle navigation, ranking first in the industry, and is the first in China and the top five navigation electronic map manufacturers in the world. After listing, the industrial chain business layout is carried out through a series of internal extension and extension. At present, the company’s business covers five major businesses, including navigation business, advanced assisted driving and automatic driving business, Internet of vehicles business, chip business and location big data service business, so as to realize the “five in one” business layout.
Performance improvement, strategic focus on automatic driving and automotive chip business: in 2020, the company’s revenue and profit declined due to the impact of the epidemic. Since 2021, the commercialization process of the company’s advanced auxiliary driving, automatic driving and Internet of vehicles has accelerated. The company achieved an operating revenue of 1.863 billion yuan in the first three quarters of 21 years, with a year-on-year increase of 21.78% and a net profit attributable to the parent company of – 42 million yuan. Facing the macroeconomic situation and changes in the industry, the company actively adjusts its organizational structure. The current strategy focuses on new businesses such as automatic driving and automotive chips. In 2021, the company completed a fixed increase of 4 billion yuan for projects such as intelligent Internet connected automobile chip, automatic driving map application development and automatic driving exclusive cloud platform, so as to continuously enhance its core competitiveness.
Core advantages: building high barriers: compared with other competitors, the company has accumulated three core advantages: technology, shareholder background and customer resources for many years. 1) In terms of technology, the investment in R & D continued to be high, and the proportion of technical R & D personnel was nearly 70%. We worked with the Ministry of industry and information technology and other government departments and industrial alliances to formulate a number of industrial technical standards. 2) The cross-border shareholders of state-owned assets and Internet enterprises are integrated. The top two shareholders, China Siwei (subordinate to aerospace group) and Tencent, hold 8.61% and 4.59% respectively. The background of state-owned assets is conducive to the company’s obtaining qualification licenses and participating in the formulation of industry standards; Tencent’s Internet gene provides flow and capital assistance for the company. 3) Partners and customers cover passenger cars, commercial vehicles, system providers, the Internet, government and enterprises, universities and other fields, and have built a perfect partner ecosystem.
Investment suggestion: the company has focused on the map industry for many years and enjoys the first mover advantage of technology and policy dividend. At the same time, with the promotion of data security and domestic substitution, the business increment of automatic driving and automobile chips can be expected. We expect the company’s revenue in the 21st-23rd years to be RMB 2.923 billion, RMB 3.843 billion and RMB 4.979 billion respectively, and the net profit attributable to the parent company to be RMB 109 million, RMB 319 million and RMB 542 million respectively, with growth rates of 135.2%, 193.6% and 69.8%. Give the company a 22-year target market value of 55.368 billion yuan, corresponding to the target price of 23.31 yuan / share, and maintain the “buy” rating.
Risk warning: the recovery of upstream demand is less than expected; Technology research and development is not as expected; Policy promotion is less than expected; Industry competition intensifies; Goodwill impairment risk; Risk of reduction of major shareholders; Litigation risk.
