09/04/2020

Qianfang Technology (002373) 2018 Annual Report Comments: One Body and Two Wings Strategy with Performance in Accordance with Expectations Continues to Achieve Results

Qianfang Technology (002373) 2018 Annual Report Comments: “One Body and Two Wings” Strategy with Performance in Accordance with Expectations Continues to Achieve Results

I. Event Overview The company’s total operating income in 2018 was 72.

51 ppm, an increase of 35 in ten years.

35%; net profit attributable to mother 7.

63 ppm, an increase of 63 in ten years.

80%.

It is planned to distribute a cash dividend of 0 to every 10 shares to all shareholders.

55 yuan (including tax), 0 bonus shares (including tax), not converted to share capital with the accumulation fund.

The growth rate of revenue and net profit attributable to mothers is basically the same as the previously announced expected growth rate, and the performance is in line with expectations.

Second, analyze and judge the traffic business: the track junction area remains ahead, and the airport and electronic license plates accelerate the layout. The track leading position in the PIS area continues to maintain.

The company’s rail transit passenger information service system (PIS) has been used in more than 100 subways in 20 cities including Beijing, Shanghai, and Guangzhou. The core system accounts for about 60% of the country’s market share; the first high-definition display passenger information system has gradually been establishedDevelop more than 160 subway lines covering 35 domestic cities.

In the field of urban transportation, the bidding situation is good, and emerging areas such as airports and electronic license plates are accelerating their deployment.

In terms of urban transportation, the company won the bid for the 2018 TOCC project, such as the Huizhou (TOCC) project, in the first half of the year, and the demonstration effect was prominent; in the field of electronic license plates, the company participated in 杭州桑拿 the national standards for electronic license plates such as the Code for Installation of Electronic Sign Identification EquipmentDeveloped and won the nation’s first automotive electronic logo social operation project.

In terms of airport business, it has won bids for the Capital Airport Airport Inspection System and Capital Airport WIFI Transformation, and has made breakthroughs in the field of airport risk control.

Security and Internet of Vehicles business: breakthroughs have been made in the AI algorithm end, and the first-mover advantage of vehicle-road collaboration has clearly led the company to lay a solid foundation, with large orders constantly landing.

In 2017, Yushi Technology’s video business market share ranked third in China’s security market and sixth in the world. In 2018, Yushi Technology’s revenue grew by 53.

90%, still maintains a high degree of prosperity and the growth rate exceeds most industry segments.

Large-scale projects such as the peripheral security projects of the Beijing World Horticultural Expo have been continuously implemented, and the establishment of benchmarking effects in the Xueliang engineering field has also provided important support for performance growth.

The AI algorithm has made breakthroughs, and the level of intelligence among traditional security vendors is relatively prominent.

In March 2019, the company’s computer vision and deep learning algorithms increased the AP of traffic scene target detection to 0 in a multi-object tracking (MOT) challenge global competition.

89X, showing the highest recognition accuracy and the lowest false alarm rate.

As a traditional manufacturer, breakthroughs in the field of algorithms are expected to bring greater value to the company’s security business.

The vehicle-road collaboration field builds first-mover advantages and leads the industry development.

Deployed, the company’s V2X series products have been applied in “National Intelligent Vehicle and Intelligent Transportation (Beijing-Jiji) Demonstration Zone Haidian Base” and other applications. The Intelligent Vehicle Alliance Industry Innovation Center has completed an autonomous driving road test mileage of more than 120,000 kilometers.Passed the “three-span” interoperability test; in progress, the company and Baidu Apollo’s vehicle-road collaboration equipment has already landed on the Yanchong Expressway.

Third, investment advice The company’s security business market is stable and significant breakthroughs have been made in AI algorithms. At the same time, the company has a high city share in multiple segments of smart transportation, and the first-mover advantage of the vehicle-road collaboration business is obvious.

The EPS for 2019-2021 is predicted to be 0.

67, 0.

87 and 1.

04 yuan, the corresponding PE is 30X, 23X and 20X.

The overall average assessment of the Wind security sector is 76X, and the average assessment of the smart car sector is 67X. The company has a certain estimation advantage, and for the first time, it is given a “recommended” rating.