NavInfo (002405): The harvest of Huawei’s official purchase order indicates the inflection point of business
Event: The company announced in the evening that the company recently received an application from Huawei for purchasing autonomous driving map data in the area specified by the company.
The company will provide Huawei with advanced map testing and verification services. At the same time, the two parties will jointly complete the Huawei autonomous driving verification project and promote the implementation of the Huawei autonomous driving project.
Opinion: Eliminate market doubts and achieve substantial progress in cooperation.
According to the official website of the Ministry of Natural Resources, Huawei announced in July that it became the 20th domestic navigation electronic map production level A qualification means the owner (level A qualification means that it can legally make autonomous driving maps (high-precision maps)).
Investors in some markets are worried that after Huawei obtains a map surveying and mapping license, it will compete directly with the company, which will affect the relevant cooperation between the two parties in the autonomous driving business.
We have always believed that Huawei’s application for licenses does not necessarily involve a large-scale entry into the advanced map market. Instead, Huawei’s business cooperation with the company has been proceeding in an orderly manner in consideration of high-precision map data updates and storage compliance requirements.
The landing of the order cooperation announced in this announcement proves that the two parties have a good tacit business cooperation, trying to dispel market doubts.
The order fully confirms the company’s absolute strength in the high-precision map industry.
The core elements of the fine map competition are production service quality and data ecology.
Judging from the above two dimensions, NavInfo’s new advanced map products are highly competitive.
Owned, from the perspective of production and service quality, the company has nearly 20 years of map collection and production experience, and the quality (precision, accuracy, etc.) of map products and services have been unanimously recognized by mainstream car manufacturers.
At the same time, from the perspective of data ecology, the company has taken the lead in binding Didi, Huawei, BMW and other giants, which has unparalleled advantages in data.
The upcoming Huawei high-end high-precision map service project is a full recognition of the company’s high-precision map data and service research and development capabilities and product performance.
The “Huawei” combination has great potential for the smart car industry.
Huawei is an important strategic partner of NavInfo. The two parties formally signed a “strategic cooperation agreement” at the Shanghai Auto Show in April. They will carry out all-round and in-depth cooperation in cloud service platforms, intelligent driving, connected cars, and road-coordination.In the future, we will create a “Huawei + Four-dimensional” smart car technology overall solution for the entire industry.
Huawei’s mission is to build a “smart world of connected things”, and 4D is committed to building a “smart car brain”. Both parties have a high degree of consensus and judgment on the transformation of the automotive industry, and there are obvious synergistic and complementary effects on genes and businesses.
The release of this order is an important landing for the cooperation between the two parties in the field of maps. We also look forward to the development of business cooperation between the two parties in the fields of vehicle networking and vehicle-road coordination.
Multiple business inflection points are approaching, laying the foundation for next year’s performance potential.
1) Core map business.
According to reports from Wall Street, Tesla’s Shanghai plant is about to start production, and the annual output of the project is planned to be 500,000 electric vehicles.
The commissioning of the Shanghai plant will lead to an increase in Tesla deliveries and a significant reduction in sales prices.
Considering the high cost performance of the domestic version of Tesla, it is very likely to become the explosive model of the domestic auto market.
As the exclusive supplier of Tesla Maps, the company will fully benefit.
In addition, the company’s previous announcement 成都桑拿网 to win Honda’s long-term core map orders will also bring a small increase; 2) Telematics business: The company has successively won the BMW CNS (Automotive Interconnect System) service agreement, and TLP (Interconnected Car Location Data Platform))) Service agreement, Honda real-time traffic information data, Mercedes-Benz connected car services, the above-mentioned newly locked mid-to-long-term contracts are expected to help the growth of connected car business; 3) Location big data business: the company ‘s location big data business growth in the first half of the year increased by more than 80%, performanceEye-catching, ample orders in hand, is expected to maintain high growth; 4) Chips: According to the “Performance Requirements and Test Methods for Tire Pressure Monitoring System of Passenger Cars” requirements, mandatory installation on all vehicles from January 1, 2020, tiresDemand for the pressure monitoring chip market will usher in a substantial increase.
According to the company’s introduction in the investor interactive Q & A, Jiefa Technology’s tire pressure monitoring chip is about to undergo annual conversion in 2019 and is expected to benefit fully.
Investment suggestion: The company has successively obtained multiple heavyweight orders since the second half of the year, and has continued to expand the industry “friend circle” and influence through multiple strategic cooperation agreements, which fully reflects the interests and strength of industry leaders.
We are very optimistic about the company’s strategic prospects for building a “smart car brain” and its industry competitiveness. It is expected that the company’s EPS in 2019 and 2020 will be zero.
32 yuan, maintain Buy-A rating, 12-month target price of 22 yuan.
Risk warning: NavInfo’s cooperation with Huawei has exceeded expectations; the development of innovative businesses has fallen short of expectations.