\u3000\u3 China Vanke Co.Ltd(000002) 373 China Transinfo Technology Co.Ltd(002373) )
Event: China Transinfo Technology Co.Ltd(002373) released the first quarter report of 2022 on April 27. In the first quarter of 2022, the company achieved a revenue of 1.312 billion yuan, a year-on-year decrease of 26.11%; The loss of net profit attributable to the parent company was 256 million yuan, a year-on-year decrease of 282.5%, deducting the loss of net profit not attributable to the parent company of 65 million yuan, a year-on-year decrease of 149.4%.
The disturbance of epidemic situation superimposes non recurrent factors, and the short-term performance is under pressure
In 2022q1, the revenue side and profit side of the company declined to a certain extent. From the revenue side, the company achieved a revenue of 1.312 billion yuan in the first quarter, a year-on-year decrease of 26.11%, mainly due to the impact of the epidemic. On the one hand, product sales decreased year-on-year, and at the same time, the delivery of transportation solution projects was also partially delayed, resulting in the corresponding delay in revenue recognition. From the perspective of gross profit margin, the gross profit margin of the company in the first quarter was 30.66%, which was basically consistent with the same period last year, reflecting that the price rise trend of upstream raw materials has gradually stabilized. From the profit side, the company's net profit attributable to the parent company in the first quarter was 256 million yuan, mainly because the company held Hangzhou Hopechart Iot Technology Co.Ltd(688288) about 15% equity. Due to market fluctuations, the decline of its fair value had an impact on the net profit of 227 million yuan. At the same time, considering the rigidity of various expenses, the reduction of the income side also has a certain pressure on the profit side.
Digitization is still the long-term driving force of intelligent transportation, and we should be cautious and optimistic about the annual performance
We remain optimistic about the company's profit recovery in 2022. From the perspective of industry prosperity, in the past six months, the Ministry of industry and information technology, the Ministry of communications and other relevant ministries and commissions have successively issued the "14th five year plan" related to smart transportation, including the "14th five year plan" for the development of information and communication industry issued by the Ministry of industry and information technology, the "14th five year plan" for digital transportation issued by the Ministry of communications, and the "outline of national comprehensive three-dimensional transportation network" issued by the State Council. We believe that the planning of intelligent transportation or digital transportation by various departments has far-reaching guiding significance for the industrial development in the next five years. Although the epidemic has a certain impact in the short term, the prosperity of the industry is expected to recover in the long term. Internally, according to the information disclosed in the annual report, on the one hand, the company has basically completed the channel sinking and large-scale R & D investment in 2021, and it is expected that various expenses may be controlled in 2022; On the other hand, in view of the price rise of upstream raw materials, the company has also made certain material preparation, which is conducive to maintaining the stability of costs. In addition, with the mitigation of the epidemic situation in various regions and the orderly delivery of existing projects, we expect the company's profit to grow synchronously with its revenue in 2022.
Waiting for triple change to help the company develop with high quality
In addition to the changes at the performance level, we suggest paying attention to the triple changes of the company itself: 1) accelerate the promotion of vehicle road coordination strategy. The company added capital to Lianlu intelligent transportation in 2021. Relying on the high-quality front loading experience and qualification of Lianlu intelligent transportation, the company won two 5gv box fixed-point projects on the basis of delivering hundreds of thousands of front loading 4gt box products in 2021. We believe that the capital increase of Lianlu intelligent transportation is an important layout of the company in the field of vehicle road coordination, which is expected to form a complete closed loop from vehicle end to road end. 2) Strengthen AI capability and enhance the added value of business technology. The construction of AI capability is a major layout of the company's strategic transformation. Therefore, the company established boguan intelligence in early 2020 as a business unit parallel to intelligent transportation and intelligent IOT. According to the annual report data, by the end of 2021, boguan intelligence has launched 100 + AI training and learning algorithm, 200 + pre training model and 900 + industry algorithm. We expect that boguan intelligence is expected to improve the added value of solution technology and promote the continuous optimization of the company's profitability through internal and external empowerment. 3) Transformation from project system to platform. In 2020, the company released omni-t, the industry's first global transportation solution. On the one hand, it expanded the middle platform by forming standard modules, so as to improve the reuse rate of the project; On the other hand, it also catalyzes the transformation of the company from project system to platform. According to the disclosure of the company's 2021 semi annual report, some products of the company have achieved the satisfaction rate of standard modules of similar businesses of nearly 80%, and the R & D hours have decreased by nearly 40%. In addition, the company's transportation cloud business achieved a revenue of 341 million yuan in 2021, with a year-on-year increase of 56% and a gross profit margin of 53.1%, an increase of 2 percentage points over the same period last year, with a good development momentum. We believe that at present, the company is at the key node of business model upgrading. With the continuous improvement of the proportion of traffic cloud business revenue, the company's transformation logic from project system to platform is expected to continue to be realized.
Investment suggestion: we believe that the company is the leader of intelligent transportation and the leader of intelligent IOT. With the business model transformation brought by omni-t and the establishment of boguan intelligence to strengthen AI and product capabilities, the capital injection of Lianlu intelligent transportation has accelerated the closed-loop of vehicle end and roadside solutions, and the long-term competitive advantage is expected to expand. The company is the direct beneficiary of the digital economy. We expect that the company's revenue from 2022 to 2024 will be 11.14/131.1/15.15 billion yuan respectively, and the net profit attributable to the parent company will be 8.11/10.77/1.407 billion yuan respectively, maintaining the Buy-A investment rating. The six-month target price is 12.78 yuan, corresponding to 25 times of PE in 2022.
Risk tips: 1) overseas epidemic recovery is less than expected; 2) The transformation speed of industry digital intelligence is lower than expected; 3) The landing speed of the company's intelligent transportation solution is lower than expected; 4) The risk of intensified competition in the industry.
