\u3000\u3 Guocheng Mining Co.Ltd(000688) 066 Piesat Information Technology Co.Ltd(688066) )
Event review:
The company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue was 1.468 billion, with a year-on-year growth rate of + 73.43%, and the net profit attributable to the parent company was 200 million, with a year-on-year growth rate of + 55.29%; Q1 achieved a revenue of 195 million, with a year-on-year growth rate of + 179.26% and a net profit attributable to the parent company of – 50 million, mainly due to the fact that the company usually recognized less revenue in the first quarter and increased the construction of marketing channels. The total number of new orders signed by the company in 2021 was 2.17 billion, double that of last year, of which the local market made a significant breakthrough. In general, the company has abundant orders on hand, has a solid foundation for the annual performance, and the performance growth is sustainable.
The company’s revenue structure continues to improve and its profitability is expected to be further improved
On the revenue side, in 2021, the revenue from spatial infrastructure planning and construction accounted for 10.7%, the revenue from pie + industry accounted for 86.3%, the revenue from cloud services accounted for 3.0%, and the revenue from industrial applications further increased. On the cost side, the comprehensive gross profit margin in 2021 was 51.97%, slightly lower than that of last year. The investment in the early application of Fengpu and other industries affected the gross profit margin to a certain extent. With the increase of the replicability of business and products, the gross profit margin is expected to rise; On the expense side, the R & D, management and sales expense rate in 2021 was 35.15%, basically the same as that of last year, in which the R & D and management expense rate decreased, and the company carried out ipd2 Version 0 system construction, fine management mode has achieved initial results, and the sales expense rate has increased by about 2 percentage points compared with last year. It mainly focuses on the construction of local channels and actively cooperates with the development of industrial application market.
The company has abundant orders, and is expected to take over Fengpu in water conservancy, agriculture and other fields and become a new explosive point
For the planning and construction of space infrastructure, the company obtained 279 million orders in special fields through a single source as an overall unit, which significantly improved its competitiveness. Pie + industry, 1) in the field of emergency response, it is estimated that the market space of Fengpu will be about 10 billion in 2022, and the company is expected to maintain a market share of 15% – 20%. Fengpu’s subsequent assessment zoning, disaster early warning and other businesses will be carried out one after another; 2) In special fields, the company’s customers have expanded from a single service to multiple services, and its business has expanded from information interpretation and battlefield environment construction to military surveying and mapping and model loading, horizontal and vertical expansion and continuous penetration; 3) In the field of natural resources, real-world three-dimensional pilot projects have been launched one after another. The company has participated in many pilot projects in Sichuan, Ningxia, Baotou, Huanggang, Hebi and so on. The product system has been verified and the pace of winning the bid has been significantly accelerated; 4) For water conservancy and agriculture, under the background of steady economic growth and vigorous development of digital economy, the company is expected to fully benefit from the construction of space-time bases such as digital twin waters and digital villages, which has become another explosive point after Fengpu.
Investment advice
Looking forward to the future, Piesat Information Technology Co.Ltd(688066) takes the midstream data processing capability (PIE) as the core and expands to downstream applications and upstream data acquisition. The company’s annual performance is highly deterministic. It is gradually getting rid of the constraints brought by the government project business model and moving towards a multi scenario and platform business model such as gas water environment, emergency, special, natural resources and agriculture. The predicted value of the company’s net profit attributable to the parent company from 2022 to 2023 was adjusted to 300 million yuan and 432 million yuan respectively (the previous value was 271 million yuan and 383 million yuan), and the predicted value of net profit attributable to the parent company in 2024 was increased to 605 million yuan, corresponding to EPS of 163 million yuan, 234 million yuan and 3.28 yuan. The current stock price corresponding to PE from 2022 to 2024 was 36.97x/25.69x/18.34x respectively. Maintain the “buy” rating.
Risk tips
1) the informatization construction in special fields is less than expected;
2) the follow-up, real 3D, cloud service and other business expansion of Fengpu are not as expected;
3) depreciation and amortization of the company’s InSAR satellite constellation is a drag on performance risk.
