\u3000\u3 Guocheng Mining Co.Ltd(000688) 066 Piesat Information Technology Co.Ltd(688066) )
Event: the company announced on April 28 that in 2021, the revenue was 1.468 billion yuan (+ 73.43%), the net profit attributable to the parent company was 200 million yuan (+ 55.19%), the net profit not attributable to the parent company was 151 million yuan (+ 31.81%), the gross profit margin was 51.97% (- 1.48 PCTs), and the net profit margin was 13.61% (- 1.59 PCTs). The revenue of 2022q1 was 195 million yuan (+ 179.26%), and the net profit attributable to the parent company was – 50 million yuan (decreased by 05 million yuan compared with 2021q1). In addition, the company disclosed that the new orders signed in 2021 were 2.170 billion yuan (+ 88.70%), and the new orders signed in 2022q1 were 598 million yuan (+ 269.14%).
Key investment points:
The company’s revenue and net profit continued to grow at a high speed, and the newly signed orders increased at a high speed
In 2021, the company’s operating revenue (1.468 billion yuan, + 73.43%) and net profit attributable to the parent company (200 million yuan, + 55.19%) achieved rapid growth, which was mainly due to the improvement of the company’s four-level marketing system, the large volume of local market, the record high number of new orders signed throughout the year, and the steady growth of the company’s revenue from information construction in special fields. Under the rapid growth of the company’s revenue, the company’s gross profit margin (51.97%, – 1.48 PCTs) and net profit margin (13.61%, – 1.59 PCTs) decreased slightly, mainly due to the increase of the company’s three fee expense ratio (21.48%, + 2.25 PCTs) and the increase of credit impairment loss caused by the increase of bad debt loss of accounts receivable (- 77 million yuan, an increase of 40 million yuan compared with 2021). It is worth noting that the compound growth rate of the company’s income in recent three years has reached 56.29% and the compound growth rate of net profit attributable to the parent has reached 54.73%, highlighting that the company is currently in a stage of rapid development.
In 2022q1, the company’s operating revenue (195 million yuan, + 179.26%) doubled. The net profit attributable to the parent company (- 50 million yuan, a decrease of 05 million yuan compared with 2021q1) is basically the same as 2021q1. We believe that it is seasonal with the company’s performance. At the same time, the company increased its marketing and R & D investment in the first quarter compared with previous years, and the gross profit margin brought by the expansion of new business areas (52.83%, – 2.55pcts) decreased slightly.
Specific to the company’s product lines, in 2021, the revenue of the company’s spatial infrastructure planning and construction product line (RMB 157 million, – 56.54%) declined, while the revenue of pie + industry product line (RMB 1268 million, + 174.37%) and cloud service product line (RMB 44 million, + 80.67%) increased significantly. In addition, in 2021, the new orders signed by the company (2.170 billion yuan, + 88.70%) increased rapidly, of which 279 million orders in special fields were obtained by the company as an overall unit through a single source at the end of 2021. The newly signed orders in 2022q1 amounted to 598 million yuan (+ 269.14%), reflecting the remarkable results of the company’s business expansion and sufficient orders on hand, which will support the rapid growth of the company’s performance in 2022.
The company’s business can also be divided into three parts: system design and development, data analysis and application services, and self use software sales. Among them, in 2020, the company’s system design and development business revenue (749 million yuan, + 14.61%) increased rapidly, and the gross profit margin (50.92%, – 1.59 PCTs) decreased slightly; The business income of data analysis and application services (706 million yuan, + 280.65%) increased significantly, and the gross profit margin (52.24%, – 2.58 PCTs) decreased slightly; The sales revenue of self owned software (14 million yuan, + 72.74%) increased rapidly, and the gross profit margin (95.44%, – 2.93 PCTs) decreased slightly.
It can be seen that the company’s revenue structure has changed to a certain extent. With the rapid expansion of the company’s pie + industry product line, the proportion of revenue has increased significantly. The income of the company’s space infrastructure planning and construction product line has declined, which we believe may be related to the volatility of the national investment planning and project bidding arrangements for the satellite application industry. In addition, in the process of business expansion, the company’s gross profit margin decreased slightly, which is also unavoidable in the early stage of the company’s expansion of satellite remote sensing downstream application fields. With the maturity of the company’s expansion model in various industry application fields and the strengthening of replicability, the company’s gross profit margin is expected to recover in the medium and long term; At the same time, the performance of the company in 2022q1 decreased slightly, which is related to the seasonal characteristics of the company’s net profit and the increase of marketing and R & D investment. However, this will also help the company improve its competitiveness in business expansion, and then lay the foundation for the rapid growth of the company’s annual net profit. The above judgment can be verified by the sharp growth of new orders signed by the company in 2022q1.
To sum up, we judge that the company is still in the stage of rapid business expansion, and its revenue is expected to maintain rapid growth. Under this situation, the company’s comprehensive gross profit margin may decline in the short term, but the decline space is limited, and the general trend of rapid growth of the company’s net profit will not be changed.
The satellite remote sensing industry chain will be improved with fixed growth, and the competitive advantage in downstream application fields is expected to be strengthened
In July 2021, the company raised 700 million yuan through public offering of A-Shares for distributed interferometric SAR high-resolution remote sensing satellite system project, Beijing innovation R & D center project and supplementary working capital project. Among them, the company will invest 364 million yuan in the distributed interferometric SAR high-resolution remote sensing satellite system project (the construction period of the project is 2 years). The project specifically includes entrusting a third party to develop, launch, operate and maintain an autonomous and controllable SAR remote sensing satellite constellation, building a SAR Remote Sensing satellite data service platform, and providing external basic data services at all levels, data processing value-added services, software platform services and industrial application services. At present, the ” Piesat Information Technology Co.Ltd(688066) 1″ satellite constellation has completed the frequency resource application and most of the frequency coordination work, completed the product supplier selection and detailed scheme design, and completed the commissioning of most satellite parts, the scheme design of ground and application systems and the development of prototype systems. The satellite engineering research and development work is progressing smoothly as planned and is expected to leave the factory in the second half of 2022. After the completion of the satellite constellation, it will become the first commercial InSAR constellation in China, provide commercial independent radar remote sensing data source, and carry out topographic mapping, imaging observation and settlement monitoring tasks all over the world.
Overall, we believe that the promotion of the company’s remote sensing satellite system project will improve the remote sensing satellite data source upstream of the company and open up the satellite remote sensing industry chain. On the one hand, it is expected to reduce the cost of the company’s main business. On the other hand, it is also expected to enable the company to obtain greater competitive advantage in the market expansion of downstream satellite remote sensing applications based on commercial independent remote sensing data sources.
The company increased its marketing investment and R & D investment, and achieved remarkable results in customer expansion in various business areas
In terms of expenses, in 2021, the company’s three fee rate (21.48%, + 2.25 PCTs) increased as a whole, mainly due to the obvious increase in the sales expense rate (9.42%, + 2.17 PCTs) due to the company’s strengthening of business expansion and market development. In addition, the company strengthened the introduction of high-level R & D personnel and university industry university research cooperation, and increased the R & D investment of core products. The R & D expenses (211 million yuan, + 61.86%) and the number of R & D personnel (476 people, + 31.49%) increased rapidly.
With the promotion of the Beijing innovation R & D center project in the company’s fixed raising investment project, the company’s R & D investment may be further strengthened. We believe that in the long run, the growth of R & D investment is expected to strengthen the company’s competitiveness in various application fields downstream of satellite remote sensing, which is conducive to the company’s future market expansion in the medium and long term.
In terms of cash flow, in 2021, the net cash flow from the company’s operating activities (- 119 million yuan, down 194 million yuan from 2020) decreased, mainly due to the increase of the company’s business volume and revenue, but the increase of procurement was greater than the increase of payment collection. At the same time, the company continued to improve the construction of marketing network and continuously increased R & D investment, resulting in a large increase in expenses; The net cash flow from investment activities (- 378 million yuan, down 407 million yuan from 2019) decreased significantly, mainly due to the company’s purchase of real estate and other R & D assets; The net cash flow from financing activities (1.007 billion yuan, + 327929%) increased significantly, mainly due to the receipt of funds raised from private placement in the current period.
In terms of other financial data, at the end of 2021, the company’s prepayments (44 million yuan, + 51.62%), accounts payable (193 million yuan, + 118.04%), inventories (290 million yuan, + 59.62%, all contract performance costs) and contract liabilities (186 million yuan, + 109.19%) increased rapidly. At the end of 2022q1, inventories continued to increase to 522 million yuan, which confirmed the rapid growth of orders on hand and the strengthening of procurement, It will be cashed into the company’s performance in the future. At the same time, the proportion of the company’s top five customers’ revenue decreased from 37.96% in 2020 to 12.87%, a decrease of 25.09 percentage points. The decline in customer concentration highlights the remarkable achievements of the company in expanding the breadth of customers in various business areas. In addition, the book balance of the company’s accounts receivable at the end of 2021 reached 1.202 billion yuan, of which 1.145 billion yuan came from the military, government departments, state-owned enterprises, colleges and universities and government affiliated institutions. We believe that although the above customers have good reputation and the possibility of bad debts is small, if the collection progress is slow, it will still have an adverse impact on the company’s net profit in the future (the loss of bad debts of accounts receivable in 2021 will be 75 million yuan), It is suggested to focus on.
The company is located in the sunrise industry of satellite remote sensing application and lays out the whole industrial chain of satellite remote sensing application
Since its establishment, the company has always been rooted in the satellite application industry. With satellite data processing software as the core, according to the different stages of industrial development and the upgrading and iteration of delivery mode, combined with the application scenarios of different industries, and explored and extended to the upstream and downstream of the industrial chain, the company has successively launched three product lines: spatial infrastructure planning and construction, industrial application services and cloud services.
① spatial infrastructure planning and construction product line
With the continuous promotion of the relevant planning of “new infrastructure”, the connotation of the space infrastructure product line is further enriched. The company’s business extends from a single satellite field to the construction of new infrastructure including perception ability and data center, and the orders continue to be large. On the original basis, the company gradually undertakes the new tasks of national information infrastructure, integration infrastructure and innovation infrastructure construction.
In terms of space infrastructure planning and design services, the company focuses on the national civil space infrastructure and the 14th five year plan for national economic and social development of the people’s Republic of China and the outline of long-term objectives for 2035, and carries out activities covering satellite operation center, satellite constellation, data center, major Earth observation infrastructure, industrial innovation infrastructure Scheme demonstration and consulting design services in the category of “new infrastructure” such as station network facilities. In 2021, based on the existing demonstration and design services of satellite ground application system, the company successively carried out consulting, design and demonstration services including special capacity-building of satellite operation center, industrial big data processing center, air space integrated governance platform and so on.
In terms of space infrastructure system construction, the company mainly focuses on efficient space-time data processing, multidimensional and three-dimensional space-time big data analysis, multi industry deep-seated comprehensive applications and services, provides one-stop services integrating observation data analysis, cloud computing power foundation, efficient algorithm model and information visualization products, excavates the deep value of data, and provides secondary empowerment Explore ways and means to improve service quality. The smart earth cloud service platform “pie engine” independently developed by the company is a set of mature products with strong inclusiveness and wide universality. It integrates various data algorithms such as optics, microwave, spectrum and radar independently developed by the company, plays an important role in supporting satellite applications such as atmospheric and marine environment, land resource environment and land, sea and air navigation, and realizes the localization substitution of core technologies in key fields.
② product line
The company has a pie engine that can be benchmarked to the Google Earth digital earth platform. With the development of the company’s business to platform, the number of sub industries with integrated access is gradually increasing. As the core product of the company’s operation and development, pie engine platform has developed from a single multi-source remote sensing data processing tool to a new generation of digital earth platform carrying massive earth observation data, carrying out spatio-temporal intelligent analysis and realizing twin modeling of the physical world; The solutions formed based on the platform cover more than ten industries, such as natural resources, emergency management, ecological environment, meteorology and ocean, agriculture and forestry, environmental consultation, hydrology and water conservancy, disaster prevention and mitigation, urban planning and so on, and provide a sharp tool for space big data analysis for the government to realize comprehensive information management and national defense information construction. In 2021, the company will rapidly promote the landing application of pie platform and solutions in provincial, municipal and county units across the country, and accurately connect with the satellite application service market of local departments. At the same time, on the basis of continuously expanding the application of advantageous industries such as meteorology and ocean, ecological environment and natural resources, the company has focused on improving the depth and breadth of satellite application service hot markets in special industries, emergency management and other fields. In addition, the company is also actively planning the construction of real 3D China, participating in relevant pilot work and developing corresponding products.
③ cloud service product line
In 2021, the company insisted on increasing the R & D investment and promotion of cloud service product line. After the company released the public beta version of pie engine cloud platform, the company gathered cutting-edge technological achievements, oriented to the direction of subdivided industries, adopted the cloud native technology architecture, introduced dozens of satellite data resources outside China, and formed a digital earth platform that comprehensively benchmarked Google earthengine in the United States. At present, the platform has nearly 70000 registered users, and its main functions include pie enginefactory, a professional processing platform for aerospace information Pie enggnestudio, a real-time analysis and calculation platform for spatiotemporal data, pie engineai, an artificial intelligence interpretation platform, and pie engineearth smart earth visualization terminal.
In terms of data sources, the company has established cooperative relations with relevant data source units outside China, accessed more than 120 kinds of satellite remote sensing data and special products, with a total amount of more than 6pb and a daily update of more than 10TB, covering more than 10 fields such as meteorology, ocean, vegetation, agriculture, water conservancy, ecology and atmosphere.
Meanwhile, in 2021, the company provided subscription SaaS services to commercial companies such as power, insurance and agriculture; For government customers, it launched the urban remote sensing monitoring cloud platform, and made customized services based on standardized cloud platform products in combination with local characteristic needs. At present, the platform has successively signed overall cooperation framework intention agreements with Hebi, Jiaxing Nanhu, Huanggang, Foshan and other governments. At the same time, the company is also actively developing mass market application products with great potential. Through the efficient cloud computing and integrated processing capacity of pie engine platform, the company provides the public with meteorological disaster early warning and air pollution control
