JXFH(SZ:300213) ZHESHANG SECURITIES·2024-11-11 08:23Investment Rating - The investment rating for the company is "Buy" [6] Core Viewpoints - The report highlights that the investment in railway intelligence is expected to significantly increase, with the proportion of information technology investment in railway construction rising from 6% during the 13th Five-Year Plan to a projected higher percentage in the 14th Five-Year Plan [1][2] - The development of 5G-R is seen as a key component for railway digitization, with the current GSM-R (2G) network facing obsolescence. The report anticipates a peak construction period for 5G-R over the next 4-6 years, with significant investment opportunities [3] - The company has established a comprehensive cooperation agreement with Huawei to leverage technologies such as 5G, AI, and cloud computing for railway applications, indicating a strategic partnership aimed at enhancing technological capabilities [3][4] Summary by Sections Investment Outlook - The report indicates that the railway sector is shifting towards smart and digital railways, with a focus on technology innovation and self-sufficiency as key trends [2] - The establishment of the National Railway Innovation Research Institute aims to accelerate the application of 5G-R, with the goal of achieving over 20 billion yuan in output value within five years [3] Financial Projections - The company is projected to achieve net profits of 0.8 billion yuan, 1.0 billion yuan, and 1.4 billion yuan for the years 2024 to 2026, representing year-on-year growth rates of 20%, 28%, and 33% respectively [5][8] - The expected price-to-earnings (P/E) ratios for 2024, 2025, and 2026 are 64, 50, and 38 times respectively, indicating a favorable valuation trend [5][8] Revenue and Profitability - The company's revenue is forecasted to grow from 1.12 billion yuan in 2023 to approximately 1.68 billion yuan by 2026, reflecting a compound annual growth rate of over 16% [8] - The report notes an improvement in profitability metrics, with net profit margins expected to increase from 5.65% in 2023 to 8.25% by 2026 [12]