\u3000\u3 Guocheng Mining Co.Ltd(000688) 509 Zhengyuan Geomatics Group Co.Ltd(688509) )
Key investment points
Relying on the technical foundation of central geological exploration enterprises, it has grown into a leading enterprise in underground pipe network and smart city
The major shareholder of the company, China General Administration of Metallurgical Geology, is the only central enterprise of geological exploration in China. It has been undertaking national key survey and mapping tasks for many years. It is an important source of technology in China's geological exploration field and has also trained and exported a large number of excellent talents. In 2013, the General Administration of metallurgy and geology of China integrated the group's high-quality surveying and mapping and underground pipe network (survey, evaluation and maintenance) business to establish a company, and actively extended to the smart city and smart pipe network. It has become a leading enterprise in China's new smart city above ground and underground in all space. The proportion of the company's traditional surveying and mapping business has gradually decreased, and the high growth underground pipe network and smart city business have increased year by year. At present, the proportion accounts for 31.28% and 25.97% respectively. The company is committed to developing into a leading enterprise of comprehensive services for smart cities in China.
Continue the resource advantages of central enterprises and build four advantages of industrial chain, brand, technology and sales
Brand advantage: it has more than ten class A qualifications for smart city related projects; China's leading enterprise of smart pipe network, the top five in the National Geographic Information Industry;
Technological advantages: (1) R & D investment increases year by year, and R & D expenditure accounts for 4.75% in 2020; (2) After 20 years of deep cultivation in the industry, there are 18 core technologies with independent intellectual property rights, and the income generated by core technologies accounts for 77%;
Advantages of industrial chain: the business goes from shallow to deep, and the business extends from surveying and Mapping - underground pipe network operation and maintenance - smart city integration, forming a four in one whole industrial chain of "land, sea and open space";
Channel advantages: the sales network covers the whole country. In order to expand the smart city business, Jiangsu, Fujian, Chengdu, Chongqing, Hunan and Anhui are taken as the center to realize the full coverage of potential advantageous areas.
Steady growth spurred the start of new urban construction, and pipe network informatization and urban intelligence ushered in an explosive period
Through the Internet of things, cloud computing and other information means, it is an inevitable way for China's urbanization development to integrate the physical information of aboveground and underground space, form an intelligent management platform, and then improve the use efficiency and management level of urban resources. In the future, only the market space of intelligent pipe network will exceed 100 billion. According to the calculation from the perspective of optimism, neutrality and pessimism, the market scale of intelligent pipe network in cities and counties in China will be 6923 / 4545 / 284.6 billion yuan respectively in 2035, and the corresponding market scale of underground pipe network business will be 230.40/384.00/460.80 yuan respectively. In 2025, the market scale of municipal and county pipe network intellectualization will be 178 / 123.3/81.2 billion yuan respectively, and the corresponding market scale of underground pipe network business will be 167 / 252 / 27 billion yuan respectively. Under the background of steady growth, combined with the renewal and transformation of urban pipe network, the realization of intelligent management of underground pipe network has been put on the specific agenda. In particular, the intelligent management of gas and water supply network is imminent.
Profit forecast and valuation
It is expected that the company will achieve 15.67/19.32 from 2021 to 2023/ 2.468 billion yuan, a year-on-year increase of - 6% / + 23% / + 28%, and the net profit attributable to the parent company was 48 / 0.96/120 million yuan, a year-on-year increase of - 25% / + 98% / + 25% respectively. Diluted EPS is 0.08/0.16/0.20 and corresponding PE is 67.14/33.85/27.05. Under the peg valuation method, the corresponding target price in 2022 is 10.97, and the corresponding market value is 6.6 billion yuan, which still has 59% room to rise compared with the current market value. For the first time, give a "buy" rating.
Risk tips
Downstream demand does not meet expectations; Business expansion fails to meet expectations; Industry competition intensifies; The spread of the epidemic exceeded expectations
