PCI-STCL(SH:600728) GOLDEN SUN SECURITIES·2024-06-30 08:31Investment Rating - The report initiates coverage with a "Buy" rating for the company [3]. Core Viewpoints - The company is a leading player in the smart transportation industry, focusing on AI technology products and services, with significant growth in revenue and net profit in 2023 [3][50]. - The smart transportation market in China is expected to grow significantly, with a projected market size exceeding 400 billion yuan in 2023, indicating substantial opportunities for the company [3][60]. - The company has established strong technological barriers through continuous innovation and a robust patent portfolio, enhancing its competitive position in the market [3][75]. Summary by Sections 1. Leading Player in Smart Transportation - The company specializes in AI technology products and services, focusing on smart rail transportation and smart city traffic [3][22]. - In 2023, the company achieved a revenue of 62.28 billion yuan, a year-on-year increase of 16.7%, and a net profit of 3.95 billion yuan, marking a return to profitability [3][50]. 2. Expansion of Smart Transportation and AI Empowerment - The demand for smart transportation solutions is driven by severe urban congestion, with the smart city market projected to reach 33 trillion yuan by 2024 [3][60]. - The AI for industry sector is anticipated to be a new growth point for artificial intelligence applications, with the company leveraging large models to enhance its service offerings [3][69]. 3. Continuous Iteration of Technological Foundations - The company has developed two major technological foundations: "HuaJia Mos Smart Subway Brain" and "IDPS City Traffic Brain," which optimize business profitability and create data barriers in the transportation industry [3][72]. - In 2023, the company added 126 patents and received 82 patent authorizations, significantly strengthening its technological moat [3][75]. 4. Multi-Dimensional AI Capability and Model Applications - The company launched the first urban traffic AI large model, "JiaDu ZhiXing," which provides generative AI services for smart traffic management [3][78]. - The company has established a comprehensive AI research capability with multiple research institutes and national-level R&D organizations, enhancing its technological layout across various applications [3][78].