Investment advisory support|Yu Xiaoming, editor|Gu Jinfeng
Source: Jufeng Investment Advisory, Good Stock Application
On April 24, the A-share market rebounded, and the low-altitude economic sector started to rise again, with more than 10 stocks in the sector rising or rising by more than 10%. 2024 is the first year of low-altitude economic development, with the intensive introduction of national and local policies, the low-altitude economic industry has ushered in a period of rapid development, and beneficiary companies have emerged. Infrastructure construction is the "shovel seller" of the low-altitude economy, and it is the primary prerequisite for the development of the low-altitude economy in various places. Today, bringing the leading target in the field of low-altitude economy + infrastructure, let's take a look at the company's investment logic.
The low-altitude economy is once again intensively catalyzed
The National Development and Reform Commission said that it is necessary to actively and steadily promote the development of low-altitude economy, and the prospects are bright. On April 17, the National Development and Reform Commission said at the macroeconomic situation and policy press conference that it is of great significance and bright prospects to promote the development of the low-altitude economy, and the next step is to promote the formation of a good situation for the healthy development of the low-altitude economy with rich and diversified scenarios, intelligent and efficient supply, and standardized regulatory safety.
According to the Suzhou News WeChat public account, on April 18, Suzhou will hold a low-altitude economic development promotion conference, at which a series of policy measures will be released, a number of relevant institutions will be unveiled and awarded, a number of fund projects and construction projects will be signed, and Suzhou's low-altitude economic application scenarios will be promoted, so as to promote the high-quality development of Suzhou's low-altitude economy. On April 15, the Wuxi low-altitude economy high-quality development work promotion meeting was held, which will focus on "low-altitude + sightseeing", "low-altitude + logistics and transportation" and "low-altitude + urban governance". Pay attention to Jufeng Investment Advisor (jfinfo)/good stock application, and the analysis and research report of the leading target of "Institutional Research and Selection" is waiting for you to get!
The basis point of the development of the low-altitude economy is expected to exceed one trillion yuan in market space
According to the National Three-Dimensional Transportation Network Planning Outline, the size of China's low-altitude economic market is expected to exceed 6 trillion yuan by 2035. The low-altitude economy is based on general aviation, so the output value structure of general aviation also has a certain reference value for the low-altitude economy.
According to data from China's civil aviation network, the output value structure of general aviation in the United States is 30% for manufacturing, 30% for services, and 40% for operations. Based on the expected market size of the low-altitude economy and the output value structure of general aviation, Huaan Securities expects that all aspects of the low-altitude economy have trillions of industrial space.
The issuance of special bonds in Q2 increased by 133% compared with the actual issuance in 01, driving the acceleration of infrastructure investment
In March, infrastructure investment in the broad sense increased by 8.6%, down 0.3 percentage points from the previous February, and infrastructure investment in the narrow sense increased by 6.6%, up 0.3 percentage points from the previous month. (1) Broad infrastructure investment increased by 8.6% in March, a decrease of 1.3 percentage points from the same period in 2023 and 0.3 percentage points from the first two months of 2024; Narrow infrastructure investment increased by 6.6%, a decrease of 2.4 percentage points from the same period in 2023 and an increase of 0.3 percentage points from the first two months of 2023. (2) From the perspective of sub-industries, investment in electricity and other industries increased by 31.5% year-on-year in March, and the growth rate increased by 6.2 percentage points month-on-month compared with the previous February; water conservancy investment increased by 14.0% year-on-year, up 0.3 percentage points from the previous February; investment in transportation and other areas increased by 5.7% year-on-year, and the growth rate decreased by 5.2 percentage points from the previous February; Public facilities increased by -2.8% year-on-year, and the growth rate decreased by 0.9 percentage points from the previous February.
PMI indicates that the construction industry is booming, and overseas orders open up room for growth. In March 2024, the PMI of the construction industry was 56.2%, up 2.7 percentage points month-on-month, of which the new orders index was 48.2%, up 0.9 percentage points month-on-month, and the business activity expectation index was 59.2%, up 3.5 percentage points month-on-month, indicating that the construction industry is booming.
Today, let's take a look at the company's investment highlights.
- The company has formed a low-altitude economic business pattern from planning consulting to the landing application of drones. It has successively provided engineering consulting services for 113 transport airports and 18 general airports.
2. In the 2023 annual report, the company achieved operating income of 610 million yuan, a year-on-year increase of 95.39%.
3. The company's main business structure is stable, providing stable cash flow and profit sources.
Introduction and main business of Huashe Group
Huashe Group is a comprehensive engineering consulting group, as well as a national engineering consulting company and high-tech enterprise. The business of Huashe Group mainly includes highways, bridges, water transportation, aviation, municipal, railway and urban rail, water conservancy, construction, environment and intelligent engineering, etc., and can provide integrated solutions for the whole life cycle from strategic planning, engineering consulting, survey and design to scientific research and development, inspection and testing, project management, construction and later operation. The group has won hundreds of national, ministerial and provincial science and technology progress awards, excellent engineering survey and design awards, consulting achievement awards and a number of international awards. The group is a ISO9001 certified enterprise and a high-tech enterprise in Jiangsu Province.
The concept of Huashe Group's stock ownership
Virtual Digital Human, AIGC Concept, Spatial Computing, Low-altitude Economy, Jiangsu Sector, Convertible Bond Target, Fund Heavy Position, Margin Trading, Water Conservancy Construction, SSE 380, Shanghai-Hong Kong Stock Connect, Sponge City, Engineering Consulting Services, Artificial Intelligence, Unmanned Driving, Rural Revitalization, Huawei Concept, Digital Twin.
What are the domestic peer companies of Huashe Group?
Huashe Group, Taiji Industry, Youan Design, Tongji Technology, China Design Co., Ltd., Huajian Group, Exploration and Construction Co., Ltd., Meiyan Jixiang, Jay Design, Zhongheng Design, Tus Design, C&D Hecheng, Zhubo Design, Gan Consulting, Shenzhen Ruijie, Hanjia Design, Zhongda'an, Huatu Shanding, Zhonggong Hi-Tech, CCCC Design, Jiangsu Jiaoke, New City, Surveying and Mapping Co., Ltd., Academy of Construction Sciences, Huayang International, Design Research Institute, Huaxi Nonferrous Metals, Design Institute, Metro Design, Leo Planning, Hope Co., Ltd., Hualan Group, Shenshui Planning Institute, Shanshui Bide, COFCO Science & Industry, Shenzhen Chengjiao, Jianyan Design, Bidding Co., Ltd., China Design Consulting, Guangzi International, Xujie Technology, Huawei Design, Matrix Co., Ltd., Shanghai Jianke, Qingju Technology, Suzhou Planning, etc.
What is the basic situation of Huashe Group's stock issuance?
The total share capital of Huashe Group is 684 million shares, of which 669 million A shares are outstanding. As of April 23, the total market capitalization was 6.489 billion, the circulating market value was 6.345 billion yuan, and the price-earnings ratio was 9.3. The number of shareholders is 23,400. The largest shareholder is Yang Weidong, with the top ten shareholders accounting for 23.25% of the shares.
It has formed a low-altitude economic business pattern from planning consultation to UAV landing application
The company has provided engineering consulting services for 113 transport airports and 18 general airports. Relying on the company's industry think tank (Beijing Civil Aviation Institute) + planning and design industry planning (company headquarters) + industry application (China Construction Aviation), a low-altitude economic business pattern has been formed from industry planning, standard policy research, to general aviation and supporting facilities design consulting, to the construction of comprehensive management and control platforms and the landing and application of the UAV industry. According to the Suzhou Public Resources Trading Platform on March 26, the company won the bid for the construction and service project of Taicang civil UAV test flight base, with a bid amount of 26.35 million yuan. The Ganzhou Low-altitude Economic Industrial Park designed by the company has become the only flight test base built with Class B general airport standards in China.
The revenue growth in the 2023 annual report is significant
According to the 2023 annual report released by the company, the company achieved operating income of 610 million yuan, a year-on-year increase of 95.39%, a net profit attributable to the parent company of 80.54 million yuan, a year-on-year turnaround, a net cash flow from operating activities of 107 million yuan, a year-on-year decrease of 30.94%, a gross profit margin of 29.82%, a year-on-year decrease of 4.48 percentage points, a basic earnings per share of 0.74 yuan, a year-on-year positive, and an asset-liability ratio of 34.84% , up 0.61 percentage points year-on-year, diluted return on equity was 6.08%, positive year-on-year, inventory turnover was 11.22 times, up 6.06 times year-on-year, and total asset turnover was 0.31 times, up 0.15 times year-on-year.
The main business structure is stable, providing stable cash flow and profit sources
The company's operating income mainly comes from four major business segments, of which the landscape lighting engineering sector occupies the largest proportion, reaching 90.15%, and this part of the business will bring 569 million yuan in revenue in 2023. Although the revenue of other service sectors of landscape lighting accounts for a relatively small proportion, it also has a stable contribution, achieving a revenue of 27.6541 million yuan. Although the landscape lighting design sector does not account for a high proportion of revenue, accounting for only 4.31%, the gross profit margin is outstanding, reaching 80.10%, which indicates that the sector has high profitability. Although the other business segments accounted for the lowest proportion of revenue, only 0.53%, the gross profit margin also reached 29.15%, showing the profitability potential of this segment. Overall, the performance of the four business segments was solid, providing the company with a stable source of cash flow and profits.
In the urban lighting sector, we will consolidate our leading position in the industry and create new brand value
The urban lighting sector maintained its leading position in the industry, expanded into new markets, deepened services and enhanced brand value. The company promotes the national layout of business with the dual centers of "Shanghai and Chengdu" and expands its market share. Through the full life cycle service model, the in-depth service has been widely recognized. At the same time, it will expand its services in the fields of urban tourism, urban renewal and commercial blocks, and increase its commercial value and urban soft power. The company is also innovating the tour experience, providing an all-weather immersive scene experience through AR and VR technology. During the reporting period, a number of projects won lighting engineering design awards, demonstrating the company's strength. In the digital intelligence source sector, we will innovate and promote the "energy +" model to achieve differentiated competition
Adhering to the company's advantages, the digital intelligence source sector innovates and promotes the "energy +" model, provides customized energy solutions for municipal, hospital, school, industrial park and other characteristic scenarios, and promotes regional low-carbon development. During the period, the company successfully implemented the "Green Power Lights up Dalian" project, becoming the first government office building in Northeast China to use green energy, with a significant demonstration effect. At the same time, the company has improved the efficiency of the street lighting system through technological upgrading and energy-saving transformation, and helped the sustainable use of urban energy. The management platform continues to develop digital functions, including real-time energy data, energy conservation and carbon indicator analysis, etc., to promote the high-quality development of distributed digital energy.
In the digital entertainment sector, the implementation of benchmark demonstration projects has won wide recognition in the market
The digital entertainment sector uses world-class creativity and technology to create demonstration applications in multiple scenarios, which have been recognized by the market. During the period, a number of 4D cinema upgrade projects were completed, and innovative projects were launched, such as Wuhan Wushang Dream Times Square WS Dream Park and Qingdao Zhongshan Road "Mountains and Seas Resort" Cultural Tourism Metaverse APP. In addition, in cooperation with strategic partners, we have created the "LEGO Factory Adventure Tour" project in Legoland Shenzhen Resort. The company actively explores the application of wearable devices in scenic spots to create a hybrid display experience that integrates virtual and real. During the reporting period, the company's brand and projects won a number of awards, demonstrating its competitiveness.
Introduction of senior executives of Huashe Group
Huashe Group is Yang Weidong, male, born in December 1966, Chinese nationality, no permanent right of abode abroad, researcher-level senior engineer, doctoral supervisor, young and middle-aged experts with outstanding contributions in Jiangsu Province, outstanding engineering survey and designer in Jiangsu Province, science and technology entrepreneur in Jiangsu Province, industrial professor in Jiangsu Province, selected as "333 Talent Project" in Jiangsu Province, Nanjing Model Worker, and the sixth batch of young and middle-aged top-notch talents in Nanjing. In July 1991, he graduated from Nanjing University with a master's degree in hydrogeology and engineering geology. In the same year, he worked in Jiangsu Provincial Transportation Planning and Design Institute, and successively served as project manager, department manager, deputy general manager, general manager and vice president of Jiangsu Transportation Planning and Design Institute of Jiangsu Weixin Engineering Consulting Co., Ltd. In August 2005, he was appointed as the director and deputy general manager of Jiangsu Transportation Planning and Design Institute Co., Ltd. and the general manager of Jiangsu Weixin Company. In August 2008, he was appointed as the director and general manager of Jiangsu Transportation Planning and Design Institute Co., Ltd. In January 2017, he was appointed as the chairman of Huashe Design Group Co., Ltd.
Investment advice
Considering the current pace of overall domestic economic recovery, the company's business structure adjustment and internal control have achieved excellent results, we have lowered the 2024-2025 operating income forecast of 5.659/5.907 billion yuan (the original 6.434/6.923 billion yuan), maintained the net profit attributable to the parent company forecast of 760/827 million yuan, and added the 2026 operating income/net profit attributable to the parent company/EPS forecast, which are 6.174 billion yuan/890 million yuan/1.30 yuan, and EPS 1.11/ 1.21/1.30 yuan. Maintain "Buy" rating.
Enlightenment Today:
When the market goes down, you can easily sell good things at a discount, but once the market goes up, it is very difficult to buy them back. ---- Warren Buffett
Risk Warning
Demand is lower than expected, software product market expansion is less than expected, systemic risk.
Reference Sources:
Huaxi Securities - 23 years to improve quality and efficiency, low-altitude economy + digital blossoms are in full bloom - 20240411
Guotai Junan Securities-Low-altitude economy ushered in a continuous catalytic 20240329
(Investment advisory support: Yu Xiaoming, practicing certificate: A0680622030012)
Disclaimer: The above content is for reference only and does not constitute specific operation advice, and you shall operate at your own risk and profit and loss
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