Event:

On April 1, 2025, the company officially disclosed its 2024 annual report. The company achieved operating income of 9.139 billion yuan, a year-on-year increase of 6.02%; The net profit attributable to the parent company was 1.117 billion yuan, a year-on-year increase of 1.38%.

Opinion:

Profitability is improved, and expenses are well controlled. In 2024, the company's net profit attributable to the parent company will be 1.117 billion yuan, a year-on-year increase of 1.38%. After excluding the impact of GDR fund exchange gains and losses, the net profit attributable to the parent company/non-net profit deducted increased by 9.60%/20.26% year-on-year respectively. In 2024, the company's management expense ratio will be 4.51%, a year-on-year decrease of 0.71%, and the sales expense ratio will be 8.69%, a year-on-year decrease of 0.46%; At the same time, the company increased R&D investment, and R&D expenses increased by 7.73% year-on-year.

The main business has grown steadily, and the overseas business has achieved remarkable results. The company is a leader in the field of intelligent manufacturing and industrial automation in China, and a leader in DCS. In terms of industries, the company's revenue sources are mainly concentrated in the three major industries of chemical, petrochemical and energy. In terms of business, the company's revenue in 2024 will mainly come from the industrial automation and intelligent manufacturing solutions business, which will be +13.86% year-on-year. The company's overseas business revenue has achieved high growth from a small base (a year-on-year increase of 118.27%), and new overseas contracts will be signed of 1.355 billion yuan in 2024, a year-on-year increase of more than 35%.

The layout of industrial AI + robots can be expected to grow in new business formats. In the field of automation control and industrial AI, the company leveraged its own advantages to dig deep into downstream needs and launched the world's first UCS general control system and TPT time-series industrial large model, continuously promoting the application of generative AI in the industrial field. In the field of robotics, the company will formally establish a robot product business system in 2024, focusing on scenarios such as safety inspection, supply chain logistics, and equipment collaboration, and release the process industry robot solution "Plantbot" to achieve a breakthrough from scratch. In 2024, the company's robot business will achieve revenue of 56.0109 million yuan, and new orders will be 167 million yuan.

Profit forecast and investment rating: The company is a leader in the field of intelligent manufacturing and industrial automation in China, with a stable market share of DCS and stable growth in its main business. In 2024, the company's overseas business revenue will grow rapidly, and the new orders will be good, and it is expected to enter a period of accelerated expansion in the future.

At the same time, the company actively deploys in the field of industrial AI and robotics, and related businesses have achieved breakthroughs from 0 to 1, and are expected to continue to contribute to the increase in the future. To sum up, we expect the company's net profit attributable to the parent company in 2025-2027 to be 12.65/14.72/1.739 billion yuan respectively, and the company's EPS in 2025-2027 is expected to be 1.60/1.86/2.20 yuan respectively, and the current stock price is 52.41 yuan, corresponding to 32.7/28.2/23.8 times PE in 2025-2027.

We choose Keyuan Wisdom (002380. SZ), Baoxin Software (600845.SH), Chuanyi Co., Ltd. (603100. SH) as a comparable company. Considering the steady growth of the company's main business, and the continuous advancement of overseas business, industrial AI and robotics business, it is covered for the first time and given an "overweight" rating.

Risk warning: intensified market competition; Overseas market expansion is less than expected; R&D progress is less than expected; Downstream market demand is less than expected; Cost control is not as good as expected.