Zhongkong Technology released a performance forecast, is expected to achieve annual operating income of 7.960 billion yuan to 9.280 billion yuan in 2023, an increase of 20.17% to 40.10%; It is expected to achieve a net profit of 1.00 billion to 1.150 billion yuan, an increase of 25.32% to 44.12% year-on-year.

Based on this calculation, the 2023 Q4 revenue of Zhongkong Technology is about 2.281 billion yuan to 3.601 billion yuan, an increase of 10.14% to 50.23%; Q4 net profit is expected to be 307 million yuan to 457 million yuan, an increase of 67.76% to 149.73%.

On the reasons for the change in performance, Zhongkong Technology said in the announcement that the company focused on the process industry automation, digitalization, intelligent needs, its business stable growth, overseas business to achieve key customer breakthroughs, orders rapid growth, oil and gas business, PLC business rapid growth; At the same time, new businesses such as smart laboratory business, robot business, and smart mine business are accelerating their incubation and landing.

Among them, on the progress of overseas business of Zhongcong Technology, since the third quarter of 2023, The company has successively won the CNPC Cyprus FSRU and natural gas terminal project, Zhongbo Chemical Egypt 350 tons sulfuric acid plant project, Shandong Xin and Bangladesh JAMUNA paper total contract project, Harbin Electric International Mexico Mansani about 350MW combined cycle project and other projects. In addition, in October last year, the company’s first overseas 5S store – Saudi Arabia’s Al Khobar 5S store opened, marking another important breakthrough in its global layout.

As of the third quarter of 2023, the overseas revenue of Zhongkong technology is small, accounting for only about 4% of the company’s total revenue, and according to its plan, the overseas business volume will account for 30% of the total business volume in the next five years.

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However, Zhongcong technology also admitted: “In view of the industrial automation industry chain involves the global division of labor and cooperation, if the future global trade friction further escalation, may cause the upstream and downstream transaction costs of the industry chain increase, thus adversely affecting the company’s operation.”

It should be pointed out that recently, the original shareholders of China Control Technology IPO limited shares welcomed the lifting of the tide, the number of listed shares is 239 million, accounting for 30.43% of the total share capital of the company, and the circulation date of the stock listing is November 24, 2023. In addition, on January 8, 2024, the company’s restricted shares were lifted, accounting for about 0.52% of the outstanding shares after the lifting of the ban.

As of the close of January 3, the stock price of Zhongkong Technology closed at 42.97 yuan/share, down 3.81%, the cumulative decline of 30.18% in the last 6 months, lagging behind the CSI 300 index of 16.96 percentage points in the same period, the total market value of the company is 33.77 billion yuan.

According to Rui Industry statistics, in 2022, the company’s core product distributed control system (DCS) in the domestic market share reached 36.7%, an increase of 2.9 percentage points from the market share in 2021, and ranked first in the domestic DCS market share for 12 consecutive years.

Industrial Securities believes that Zhongkong technology performance trend is good, the overseas market accelerated breakthrough, the company in the first half of 2023 to acquire the Netherlands Hobre, in August won the bid for the Shell Huizhou Daya Bay petrochemical base hydrogen export project, is the first high-end analyzer order won in the Chinese market after the acquisition. At the same time, the company actively expand overseas markets, in the third quarter of 2023 won the bid for CNPC Cyprus FSRU and natural gas terminal project, Shandong Letter and Bangladesh Paper general contract projects; In October of the same year, the first overseas 5S store opened in Saudi Arabia; In December, the new smart site safety solution was officially launched at the Dubai BIG5 2023. In addition, the company has a good cost control effect, and continues to build 5S stores to promote order growth.