\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 728 Pci Technology Group Co.Ltd(600728) )
Event overview
Pci Technology Group Co.Ltd(600728) released the first quarterly report of 2022 on April 19. In 2022q1, the company achieved an operating revenue of 1.036 billion yuan, a year-on-year increase of 1.2%; The net profit attributable to the parent company was 37 million yuan, a year-on-year increase of 117.08%; Net profit deducted from non parent company was 32 million yuan, with a year-on-year increase of 102.91%.
2022q1 performance exceeded expectations, and the growth rate of net profit attributable to parent company exceeded 100%
On the revenue side, the company realized an operating revenue of 1.036 billion yuan in 2022q1, a year-on-year increase of 1.2%. The company’s intelligent projects in the fields of rail transit, urban transportation and safety emergency continue to be delivered on schedule. On the profit side, the company realized a net profit attributable to the parent company of 37 million yuan in 2022q1, a year-on-year increase of 117%; Net profit deducted from non parent company was 32 million yuan, with a year-on-year increase of 103%. The main reasons are: 1) the company’s product structure was optimized, the proportion of intelligent projects increased rapidly, the proportion of ICT business decreased slightly, and the overall gross profit margin was optimized, with a year-on-year increase of 1.5pct; 2) The company’s sales expense ratio decreased in the first quarter, with a year-on-year decrease of 0.7pct. In the short term, the company’s orders in smart rail transit and smart city in the past 1-2 years have been gradually fulfilled, and the short-term performance growth is guaranteed. In the medium term, the company has been landing large orders since 2021. At the same time, rail transit, as a part of stable growth infrastructure, is expected to accelerate the construction, and the performance of the company will be stable in the next 1-2 years. In the long run, the company’s long-term competitiveness has been guaranteed by the industry accumulation and the technology building of AI, AR and data.
The achievements of R & D investment began to be realized and the opening of the national market was accelerated
From the perspective of R & D, the company adheres to the business model of “core independent products + industry solutions” and continues to invest in self-developed product development. The company’s investment in self-developed products has entered the performance cashing period, and the revenue and profit are expected to continue to accelerate the release. In 2022q1, the revenue of intelligent projects in the fields of rail transit, urban transportation and urban safety emergency nearly doubled year-on-year. The gross profit margin increased from 13.6% in 2021q1 to 15.1% in 2022q1, with a year-on-year increase of 1.5pct. From the perspective of new orders, the company won many Rail Transit Intelligent projects in Chengdu, Wuhan, Changsha, Guangdong, Hong Kong and Macao Bay area, and the winning amount in Chengdu was as high as 1.29 billion yuan. We believe that the continuous optimization of the company’s product structure and the winning of projects in many places across the country have verified the company’s strong technical ability, which has laid the foundation for the company to open the nationwide business layout. In the future, the company is expected to continue to achieve high performance in its core areas on the one hand, and open the national market faster on the other.
Steady growth is the main theme of China’s economy. Rail transit, as a part of infrastructure, is expected to accelerate growth
The government work report during the two sessions pointed out that China’s gross domestic product (GDP) is expected to grow by about 5.5% in 2022. Under the policy environment of “steady growth”, strong supporting industries such as real estate and infrastructure, which play the role of ballast of economic growth, will be an important pole of China’s economic growth. Since March, the executive of the State Council has made it clear that “steady growth should be placed in a more prominent position” and pointed out that it supports the construction of new infrastructure and other projects with increased potential and higher level. Rail transit construction is an important part of infrastructure construction, which is expected to accelerate under the background of steady growth. As a high-quality enterprise deeply engaged in smart rail transit and smart city for many years, the company is expected to accumulate experience and core technical strength in combination with its own projects, grasp development opportunities, and rapidly expand its business to the whole country while consolidating the market advantages of Guangdong, Hong Kong, Macao and the Bay Area.
Investment advice
Under the background of digital economy and steady growth, the company focuses on two main application scenarios: rail transit, urban traffic core track and urban safety and emergency management. It is expected to seize the opportunity to realize rapid and large-scale production of core scenarios with the help of industry experience and technology. We expect the company to achieve revenue of RMB 7.9/98/12.1 billion from 2022 to 2024, with a year-on-year increase of 27% / 24% / 23%; The net profit attributable to the parent company was RMB 590 / 840 / 1.17 billion, with a year-on-year increase of 89% / 41% / 40%, maintaining the “buy” rating.
Risk tips
1) R & D breakthrough is less than expected; 2) Policy support is less than expected; 3) Project delivery was less than expected.
