\u3000\u3 Guocheng Mining Co.Ltd(000688) 066 Piesat Information Technology Co.Ltd(688066) )
Event review:
The company issued a plan for convertible bonds. It plans to issue no more than 1.06 billion yuan of convertible bonds, raise 756 million yuan for the digital transformation project of interactive holographic smart earth industry, and 304 million yuan for replenishing working capital. Among them, the digital transformation project of interactive holographic smart earth industry mainly includes the construction of self built UAV production line and the construction of hybrid reality smart earth.
The digital economy enables thousands of industries, and the real three-dimensional market has broad prospects
The efficiency growth and output increase brought by the application of digital economy in various industries have become the main engine to promote economic development. According to the white paper on the development of China’s digital economy (2021) issued by the Academy of information and communications technology, the scale of added value of digital economy will increase to 39.2 trillion yuan in 2020, and the proportion of digital economy in GDP will increase to 38.6%. Real 3D China is an important starting point for enabling thousands of industries in the digital economy. At present, the real 3D construction plan is in the early stage of launch and has great market potential. Before 2025, it will focus on data acquisition and platform construction. By 2035, it is required that the terrain level real 3D is better than 2m grid, the urban level real 3D is better than 5cm resolution, and the coverage of cities above prefecture level and conditional county-level cities will be realized, In the next 10 years, many application scenarios will be extended based on real 3D data, and the market space will be broader.
Actively respond to the national digital economy development strategy and build a leader in the commercial application of aerospace information
As a leading satellite operation and application service provider in China, the company has massive satellite data resources and the core technology and R & D foundation of data processing, analysis and mining, and has the inherent advantage of forming an integrated data perception system of space and space. Relying on the company’s existing remote sensing data resources and technical advantages, the fund-raising project arranges the acquisition of aerial remote sensing data to realize the great leap forward development of earth observation from sub meter level to centimeter level; Explore the construction of immersive smart earth Panorama by combining real scene 3D technology, VR technology and MR technology. We believe that the fund-raising project is beneficial to the company: 1) develop low altitude remote sensing on the basis of satellite remote sensing and consolidate the leading edge of the industry; 2) Expand the company’s capability circle, the application prospect of global twin mapping is broad, and further open the growth space.
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. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 300 million yuan, 432 million yuan and 605 million yuan respectively, with corresponding EPS of 163, 234 and 3.28 yuan, and the current share price corresponding to PE from 2022 to 2024 will be 38.66x/26.86x/19.18x 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.
