On November 30th, 2021, Zhiyang Innovation (688191) issued a notice saying: Haitong Fang Qing Tao Yubin and Huaxia Fund Mao Jun investigated our company on November 17, 2021.

Q: what are the company's main competitors?

A: Shandong ICT Electronics Co., Ltd., one of the competitors of the company's transmission products, has submitted listing materials to the China Securities Regulatory Commission, and the relevant information can be found from public channels. Judging from the financial data of transmission products disclosed by the other party, ICT confirmed transmission-related income of 237 million yuan in 2020, compared with 417 million yuan for Zhiyang in the same period. The company's sales of this product are still much larger than those of ICT.

Q: what is the company's competitive advantage in the power industry?

A: the company has rich industry experience and mature solutions; continuous R & D investment and more advanced technological innovation capability; the company has accumulated a large number of industry data and has the first-mover advantage of the industry.

Q: what is the market capacity?

A: take transmission as an example: the length of transmission lines of 110kV and above in State Grid and Southern Grid at the end of 2018 is 1.2601 million km. It is estimated that the length of 110kV transmission lines in the country so far is estimated to be 13-1.6 million km. The distance between poles and towers usually ranges from 250 meters to 500 meters. If each terminal is installed step by step, the market capacity is still relatively large. Because there is no relevant data released by the power grid at present, this calculation is not supported by authoritative data and is only for discussion.

Q: what is Huawei's cooperation with the company?

A: the company has been cooperating with Huawei since 2019. In July 2021, Zhiyang Innovation participated in the joint launch ceremony of the "Sheng Teng Intelligence Tour" solution as one of the partners of Huawei's "ascending Intelligence Tour" solution.

Q: what is the impact of the cost side on the company's profits and how to deal with it?

A: the rise in costs will certainly have a certain impact on the company, but the company has also considered the relevant situation and has reserved some major raw materials in order to cope with the possible rise in raw material prices and shortage of raw materials in the future.

Q: what is the reason for the decline in gross profit margin in the first three quarters compared with the same period last year?

Answer: the main reason for the decline in gross profit margin in the first three quarters compared with the same period last year: 1) it is mainly due to the increase in the price of chips and other raw materials, and the corresponding increase in material costs; 2) the "Technical Specification for Intelligent Monitoring Devices for Transmission Line channels" issued by the State Grid, and the market demand continues to increase. Market competition has intensified, and sales prices have declined slightly.

Q: what are the reasons for the increase in accounts receivable?

A: the company's operating income has increased by 40.28% over the same period last year. The increase in accounts receivable is mainly due to the increase in business income. In addition, the recovery of accounts receivable also needs a certain cycle. Although accounts receivable is higher than at the beginning of the year, the aging structure has been continuously optimized.

Q: why does the company not disclose the order?

A: Hello investors, the company strictly in accordance with the relevant laws and regulations for information disclosure, thank you for your advice to the company!

Q: from the company's point of view, at what stage is the demand for intelligent monitoring of the power grid, is it just beginning, or has it been expanded, what is the coverage, and will there be a big increase in demand next year compared with this year?

A: Hello, investors. The power system is an important basic industry related to the national economy, people's livelihood and social security. The overall scale of state investment in the power system has maintained a sustained and stable level in recent years. The company will continue to be based on the needs of the national smart grid construction, and is committed to providing intelligent operation and maintenance analysis and management system to industry customers, so as to improve the automation, information and intelligent level of power operation and maintenance. Thank you for your attention to the company!

Q: Hello, Mr. Dong. How is the company's business development in areas other than electric power? thank you.

A: Hello, investors. The company is actively expanding outside the power industry. At present, it is in the initial stage. Some areas have signed small bills and formed income, and the scale is still very small. Thank you for your attention to the company!

Q: when will the 2021 Annual report be released?

A: Hello, investors, the company will disclose the 2021 annual report in strict accordance with the requirements of relevant laws and regulations, please pay attention to the relevant announcement information of the company. Thank you for your attention to the company!

Q: do your contracts with State Grid and Southern Power Grid usually be settled in the fourth quarter of each year?

A: Hello investors, the power grid company and its subordinate enterprises follow the strict budget management system. According to the company's data in previous years, the settlement of sales payments accounted for a higher proportion in the fourth quarter. Thank you for your attention to the company!

Q: the company's semi-annual report and quarterly report both mentioned that a lot of investment has been made in the introduction of talents. Can you talk about the introduction of talents in detail?

A: Hello, investors. Based on sustained and healthy development and maintaining the advanced nature of technology, the company continues to increase investment in personnel introduction and salary payment, especially high-end R & D talents. In the first three quarters, the company's R & D staff increased by nearly 100 compared with the same period last year, and the overall salary payment increased by about 11.68 million yuan. Thank you for your attention to the company!

Q: does your company have any related products or research and development in the field of monitoring and inspection robots such as power grid and wind power and thermal power plants?

A: Hello to investors, the company is a professional electric power intelligent operation and maintenance analysis and management system provider, through the intelligent monitoring and data analysis of the operation status of power equipment and the surrounding environment in the transmission, substation and distribution links, provide an intelligent operation and maintenance analysis and management system integrating monitoring, management, analysis, early warning, alarm and linkage. Thank you for your interest in the company.

Q: what are the iterations of the new product?

A: in order to maintain the advanced nature of technology, the company has maintained a high level of R & D investment in recent years, and the products are constantly iterated and upgraded.

Q: does Yijiahe compete directly with us in the inspection of robots and drones?

A: the company's solutions can complement each other with UAV inspection and robot inspection, and there is no direct competition.

Q: what is the current proportion of income in Shandong Province?

A: Shandong Province accounts for about 20% of the company's total income, and the company's business has covered more than 30 provincial administrative regions across the country.

Q: how does the company implement equity incentives? What is the impact on this year's profits?

A: the company announced the equity incentive plan for 2021. The incentive tool used in the incentive plan is the second kind of restricted stock. The incentive targets are mainly technical backbones and business backbones, affecting about 4.2 million of profits in 2021.

Q: what is the order delivery cycle?

A: the delivery cycle is related to the customer's implementation plan and project type, project size, construction conditions and many other factors. The average project execution cycle is mainly 100-200 days.

Q: what is the company's understanding of the development of the power industry?

A: over the past decade, China's power investment has shown an overall growth trend. According to reports such as Polaris Power Grid, the total investment in the national power grid is expected to be nearly 3 trillion yuan during the 14th five-year Plan period. It is higher than the total investment of 2.57 trillion yuan during the 13th five-year Plan period and 2 trillion yuan during the 12th five-year Plan period. The company is optimistic about the power industry.

Q: will the profit margins of different projects vary greatly?

Answer: affected by the degree of project competition, project demand, construction conditions and other different factors, there will be some differences in gross profit margin.

Q: the design life of the company's products

A: the design life of electronic products is generally 8-10 years.

Q: how do transmission products collect information? Which part of the transmission line is mainly installed?

Answer: information collection is mainly carried out by means of image and video, and intelligent identification and early warning are carried out through the front-end edge calculation module and the background artificial intelligence analysis platform. The front-end equipment is mainly installed on the transmission tower.

Q: can the increase in the price of raw materials be transferred to the client? Is there a shortage of raw materials such as chips?

A: it takes a certain amount of time for the rise in raw material prices to be transmitted to the terminal itself, and communication is also needed to achieve it. The company is also actively communicating with customers. In order to meet the needs of customers, on the one hand, the company has made a strategic reserve of chips and other materials, on the other hand, it continues to carry out domestic substitution.

Zhiyang Innovation main business: domestic professional electric power intelligent operation and maintenance analysis and management system provider, through intelligent monitoring and data analysis of power equipment operation status and surrounding environment in transmission, substation and distribution links, provide an intelligent operation and maintenance analysis and management system that integrates monitoring, management, analysis, early warning, alarm and linkage

The third quarterly report of Zhiyang Innovation 2021 shows that the company's main income is 385 million yuan, up 40.28% from the same period last year; the net profit from returning to the mother is 50.9618 million yuan, up 1.61% from the same period last year; deducting 35.7534 million yuan from non-net profit, down 22.07% from the same period last year; among them, in the third quarter of 2021, the company's main income in a single quarter was 148 million yuan, up 31.5% from the same period last year; and the net profit in a single quarter was 27.2666 million yuan, up 32.87% from the same period last year. The non-net profit in a single quarter was 16.5184 million yuan, down 11.47% from the same period last year; the debt ratio was 26.74%, the investment income was 1.1237 million yuan, the financial expenses were-3.9149 million yuan, and the gross profit margin was 35.87%.

In the last 90 days, the stock has been rated by one agency and one by buying; in the past three months, the net outflow of financing has been 7.6614 million, and the financing balance has decreased; the net outflow of securities has been 2.7637 million, and the balance of securities lending has decreased. According to the Securities Star valuation analysis tool, Zhiyang Innovation (688191) has a good company rating of 3 stars, a good price rating of 1.5 stars, and a comprehensive valuation rating of 2.5 stars. (rating range: 1-5 stars, up to 5 stars)