The leading role of space and innovation in Telecommunications

\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 82 Longshine Technology Group Co.Ltd(300682) )

Benefiting from digital economy and dual carbon, BC end dual wheel drive has started high-quality development

The company is one of the first enterprises to start power informatization in China. It has been deeply cultivated for many years and has become a leading enterprise in energy digitization. From the perspective of industry: during the “14th five year plan” period of the two networks, the investment in informatization increased, and there is a market space of 100 billion on the power distribution side with the largest proportion of investment. From the perspective of the company: the company has accumulated profound technology and platform operation ability, and built a mature B2B2C mode around the power sales and consumption side. From 2017 to 2021, the revenue increased from 800 million yuan to 4.6 billion yuan, the net profit attributable to the parent increased from 140 million yuan to 850 million yuan, and the revenue of C-end business accounted for 22%. We believe that power informatization will continue to benefit from double carbon and digital economy. The company has profound accumulation and mature business model. It is expected to seize the opportunity and take advantage of the situation.

B-end business grows steadily, multi-point layout explores a new direction of energy informatization

Terminal B is the basic business of the company, and the revenue accounts for more than 50%. Specifically, 1) power service: power marketing system is one of the main businesses of terminal B of the company. Looking to the future, on the one hand, the demand for power marketing projects continues to be stable, and the company’s 40% market share is expected to be further improved; On the other hand, the total scale of upgrading and replacement of marketing 2.0 system reaches 7 billion yuan, which has long-term development space. 2) Comprehensive energy and digital new infrastructure: the company has strong middle and Taiwan capacity, blooms at multiple points in the industrial chain, carries out card layout, and develops a series of energy digital system services such as gas information system. We believe that the company’s current card layout will bring a new growth curve when there is a wide range of demand in the subdivided fields in the future.

The coordinated development of C-end operation services is expected to become the explosive point of the company’s performance

In recent three years, the company’s C-end business revenue has shown a trend of rapid growth. On the one hand, the company has formed mature water, electricity, fuel and other living payment services, with more than 300 million service users in 20 years, more than 10 million daily active users and a total revenue of about 450 million yuan; On the other hand, the company seized the opportunity to expand new operation scenarios such as charging pile and photovoltaic cloud platform. Over the past 21 years, the company has accessed more than 400 charging pile operators, with a total aggregate charging volume of nearly 560 million kwh, an increase of nearly 8 times over 20 years. We believe that considering the natural advantages of the aggregation platform and the charging demand of new energy vehicles with high-speed influx, the operation and development potential of charging pile is huge.

Investment advice

We expect the company to achieve revenue of 5.9 billion yuan / 7.4 billion yuan / 9.1 billion yuan from 2022 to 2024, with a year-on-year increase of 27% / 26% / 24%; The net profit attributable to the parent company was 1.1/15/2 billion yuan, with a year-on-year increase of 30% / 35% / 33%. It was covered for the first time and given a “buy” rating.

Risk tips

1) the breakthrough of technology research and development is less than expected; 2) Policy support is less than expected; 3) Downstream demand is lower than expected; 4) Loss of core technical personnel.

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