MEIYA PICO INC.(SZ:300188)2024-07-12 00:30Investment Rating - The report assigns an "Outperform" rating to the company, indicating an expected total return over the next 12-18 months that will exceed the return of its relevant broad market benchmark [18][33][34]. Core Insights - The company's performance stabilized and rebounded in Q1 2024, with a revenue of RMB 1.94 billion, up 31.78% YoY, while the net profit attributable to shareholders was a loss of RMB 34 million, improving by 79.62% YoY [5][18]. - The main business decline in 2023 was attributed to reduced customer budgets and delayed order acceptance, with total revenue for 2023 at RMB 1.984 billion, down 12.98% YoY [5][18]. - The company is focusing on deepening its cornerstone business while expanding into new sectors, particularly in big data intelligence and electronic forensics, maintaining its market leadership [8][18]. - Strategic investments are being made in new cyberspace security and digital government sectors, with the establishment of a wholly-owned subsidiary to accelerate enterprise digitalization [8][18]. Financial Summary - Revenue and profit forecasts indicate a recovery, with expected revenues of RMB 2.52 billion in 2024, RMB 3.03 billion in 2025, and RMB 3.56 billion in 2026, reflecting growth rates of 27%, 20%, and 17.7% respectively [6][27]. - The gross profit margin is projected to gradually increase, with estimates of 46.0% in 2024, 46.2% in 2025, and 46.3% in 2026 [6][27]. - The company reported a net profit attributable to shareholders of RMB 277 million in 2024, RMB 340 million in 2025, and RMB 416 million in 2026, indicating a significant turnaround from a loss of RMB 206 million in 2023 [6][27]. Business Strategy - The company is implementing the "8848+" strategy, aiming to consolidate and expand its four major industries by 2025, while also focusing on innovation and digital transformation [24][25]. - The recent rebranding to "Guotou Intelligent (Xiamen) Information Co., Ltd." is intended to enhance strategic leadership and resource allocation [23][24]. - The company is also addressing new market demands in drone safety products, focusing on improving identification and tracking technologies [9][18].