Chapter 1 Development Overview
1.1 Overview
Smart City (English: Smart City) is an urban model that uses information and communication technology (ICT) and other intelligent technologies to optimize urban planning, management and operation, improve the quality of urban life and sustainable development. It is an urban ecosystem based on digitization and intelligence, aiming to provide a more efficient, safer, greener and more convenient urban lifestyle.
The characteristics of smart cities include the following aspects:
- Digital infrastructure: Smart cities rely on digital infrastructure, including high-speed networks, Internet of Things, sensors, cloud computing, big data and other technologies, as well as smart terminal devices such as smart phones and smart watches, to achieve data collection, transmission, storage and deal with.
- Intelligent services: Smart cities realize intelligent services through the application of technologies such as artificial intelligence, machine learning, natural language processing, and machine vision. For example, use the intelligent traffic management system to optimize traffic flow, provide services such as smart public transportation, shared bicycles, and automatic driving; realize energy-saving, environmentally friendly, and humanized urban lighting through the intelligent lighting system; monitor the environment such as air quality and water quality through the intelligent environmental protection system indicators, and provide environmental protection early warning and governance services.
- Data-driven decision-making: Smart cities are based on data, and realize scientific and intelligent urban decision-making through data analysis and visualization. For example, use the big data of the intelligent transportation system to optimize the control of traffic lights and reduce traffic congestion; use big data to analyze urban energy consumption to achieve refined urban energy management, energy conservation and emission reduction.
- Public participation: Smart cities attach importance to public participation, and realize the interaction and cooperation between cities and residents through social media, smart terminals and other technical means. For example, use smart phone applications to provide urban public services, such as payment, garbage classification, etc.; through social media, online questionnaires, etc., to collect feedback and opinions from citizens and participate in urban governance and planning.
Generally speaking, smart city is a kind of urban model based on digital and intelligent technology, people-oriented and sustainable development. It aims to provide a more efficient, safer, greener and more convenient urban lifestyle.
The "smart city" of the 21st century can make full use of information and communication technology to sense, analyze, and integrate various key information of the core system of urban operation, so as to provide comprehensive services for people's livelihood, environmental protection, public safety, urban services, and industrial and commercial activities. Make intelligent responses to various needs and create a better urban life for human beings. On May 6, 2021, the official website of the Ministry of Housing and Urban-Rural Development announced the first batch of demonstration cities for the coordinated development of smart city infrastructure and intelligent connected vehicles ("Double Smart"). Six cities including Beijing, Shanghai, Guangzhou, Wuhan, Changsha, and Wuxi were selected.
Figure new smart city architecture and ten core elements
Source: Asset Information Network Qianji Investment Bank Baidu Encyclopedia Huaan Securities
The application system of smart city includes smart logistics system, smart manufacturing system, smart trade system, smart energy application system, smart public service, smart social management system, smart transportation system, smart health security system, smart housing service system, and smart cultural service system .
1.2 Development History
The development of smart cities can be traced back to the 1980s. There are mainly the following processes:
1980s: Computerization of cities
In the 1980s, the computerization of cities became the starting point for the development of smart cities. Urban computerization refers to the application of computer technology in urban management and public services, so as to realize urban informatization and intelligent management.
1990s: Digital City
In the 1990s, digital cities became the main form of smart city development. Digital city refers to the use of digital technology and communication technology to realize the intelligence and informatization of urban management and public services.
2000s: Smart Cities
In the 2000s, smart city gradually became the main concept of smart city development. Smart city refers to the use of technologies such as information technology, the Internet and the Internet of Things to realize the intelligentization, informationization, greening and sustainability of urban management and public services.
2010s: Urban Big Data
In the 2010s, urban big data became an important support for the development of smart cities. Urban big data refers to the acquisition of urban operation data through sensors, monitoring equipment, etc., and the use of big data technology to analyze and process these data, so as to realize the wisdom and intelligence of the city.
2020s: Smart Communities
In the 2020s, smart communities have become a new trend in the development of smart cities. Smart community refers to the use of technologies such as the Internet, the Internet of Things, and smart devices to realize the intelligence, informatization, and convenience of community management, services, and life.
The development of smart cities has experienced the evolution from urban computerization, digital cities, smart cities, urban big data to smart communities. The development of smart cities in the future will pay more attention to humanistic care and ecological environment, and is committed to realizing the sustainable development of the city and the happy life of the people.
The development of new smart cities is an inevitable stage of urban development based on comprehensive information and digital construction such as complete network communication infrastructure, massive data resources, and multi-field data platforms. The development of smart cities in my country has generally experienced information construction, digital construction, and intelligent construction after deep integration. The process of building a new smart city covers the integration of information technology in all aspects of urban design, construction, operation, management, and security.
Figure my country's smart city has gone through three stages of development
Source: Asset Information Network Qianji Investment Bank Huaan Securities
Chapter 2 Business Model and Revenue Model
2.1 Industry chain value chain
Smart cities involve the application of big data and artificial intelligence.
Figure part of the big data industry chain
Source: Qianji Investment Bank iFinD
Figure AI application industry chain
Source: Qianji Investment Bank iFinD
The smart city industry has a large scope, many fields, and a long chain. It has attracted many players to enter the market, including ICT equipment suppliers, telecom operators, system integrators, software developers, Internet companies, financial companies and real estate companies. With its own core capabilities and products as the entry point, it expands the application field horizontally, infiltrates and extends vertically to the upstream and downstream of the industrial chain, actively builds an ecological circle, and expands territory in the field of smart cities. A complete smart city ICT ecology includes partners in various links such as investment and financing, top-level design, integration, operation, business application, and ICT infrastructure construction. Enterprises with strong business representation in various links such as smart applications, operational services, and network security form the following smart city industry map.
Figure smart city industry map
Source: Asset Information Network Qianji Investment Bank China Academy of Communications
2.2 Business model
The business model of a smart city usually involves cooperation and collaboration between the public and private sectors, aiming to make urban services and governance smarter and more efficient. Here are some common smart city business models:
government-led model
The government-led model means that the government takes the lead in promoting the construction of smart cities, and the government contributes funds or guides social capital investment to achieve the goals of urban infrastructure construction, public service improvement, and urban governance efficiency.
PPP mode
The PPP model refers to the cooperation between the government and private enterprises to build a smart city. The government provides land and infrastructure, and private enterprises provide technical and financial support to jointly operate and manage the city's public services.
profit model
The profit-making model refers to the use of smart city technology and big data to provide commercial urban services and earn profits. For example, use business scenarios such as shared bicycles, taxis, and logistics to realize intelligent and efficient urban traffic operations.
Community co-governance model
The community co-governance model refers to the use of smart city technology to promote community residents to participate in community governance and public services. For example, community residents can report problems and needs to the community management department through smart phone applications, and jointly participate in community management and services.
Industrial Ecological Model
The industrial ecological model refers to the use of smart city technology and big data to promote the upgrading and transformation of urban industries and realize the development and growth of urban economy. For example, organically combine smart transportation, smart manufacturing, smart logistics and other fields to form a smart city industrial ecosystem and promote the innovation and upgrading of the urban economy.
In short, the smart city business model aims to achieve cooperation and collaboration between the public and private sectors, jointly promote the intelligence and efficiency of urban services and governance, and improve the quality of life and economic development of the city.
The smart city application projects include the following 8 projects:
Smart public service
Build smart public services and urban management systems. By strengthening the construction of professional application systems such as employment, medical care, culture, and housing, and by improving the standardization, precision, and intelligence of urban construction and management, we can effectively promote the sharing of urban public resources throughout the city, and actively promote the urban flow of people, logistics, and information. The coordinated and efficient operation of capital flow and capital flow will promote the transformation and upgrading of urban development while improving the efficiency of urban operation and the level of public services.
Smart City Complex
Using top technologies such as visual collection and recognition, various sensors, wireless positioning systems, RFID, barcode recognition, visual labels, etc., to build an intelligent visual Internet of Things, to carry out intelligent perception and automatic data collection of the elements of urban complexes, covering urban complexes Visualize and standardize the collected data in all aspects of commerce, office, residence, hotel, exhibition, catering, conference, entertainment and transportation, lighting, information communication and display, so that managers can perform visual urban complex management.
Smart government city comprehensive management and operation platform
Such projects have already been implemented in practice. The "Smart and Peaceful City Comprehensive Management and Operation Platform" in Heping District, Tianjin, includes four parts: command center, computer network room, intelligent monitoring system, street library in Heping District, and digital public service network system. , in which the command center system includes six central systems of the government's smart brain, namely the public security emergency system, public service system, social management system, urban management system, economic analysis system, and public opinion analysis system. To meet the needs of the region, upgrade the existing monitoring system in the area, add intelligent visual analysis equipment, improve the rapid response speed, achieve early warning, timely and rapid processing during the event, and unify the data and network, build a data center, and share the platform. Fundamentally, it effectively interconnects the data and information of various government departments, and realizes a comprehensive perception of the vehicle flow, people flow, and logistics in the entire Heping Zone. This platform will provide technical support for the leadership's scientific command and decision-making in the economic construction of the Heping Zone. .
Smart Housing Services
Carry out the research and pilot work of smart community housing, and take some residential quarters as the pilot area first, fully consider the different needs of public areas, business areas, and residential areas, integrate and apply various information technologies such as the Internet of Things, the Internet, and mobile communications, and develop community government affairs , smart home system, smart building management, smart community service, community remote monitoring, security management, smart business office and other smart application systems, making residents' life "intelligent development". Accelerate the exploration and promotion of smart community housing standards, and lay a solid foundation for the implementation of intelligent management of new buildings and communities in the city in the future.
Smart education and cultural services
Actively promote the construction of a smart education and cultural system. Construct and improve the city's education metropolitan area network and campus network projects, promote the development of smart education, focus on the construction of educational comprehensive information networks, online schools, digital courseware, teaching resource libraries, virtual libraries, comprehensive teaching management systems, distance education systems and other resources Shared database and shared application platform system. Continue to promote the re-education project, provide multi-channel education, training and employment services, and build a learning society. Continue to deepen the construction of "cultural sharing" projects, actively promote the development of advanced network culture, accelerate the pace of informatization in industries such as press and publication, radio, film and television, and electronic entertainment, strengthen the integration of information resources, and improve the public cultural information service system. Build a tourism public information service platform, provide more convenient tourism services, and enhance the brand of tourism culture.
Smart Service Application
Organize and implement some pilot projects in the smart service industry, promote innovation in the operation, management and service models of traditional service enterprises through demonstrations, and accelerate the transformation to modern smart service industries.
①Smart logistics: Cooperate with the informatization construction of comprehensive logistics parks, promote the application of radio frequency identification (RFID), multi-dimensional bar codes, satellite positioning, cargo tracking, e-commerce and other information technologies in the logistics industry, and accelerate the logistics information platform and the first logistics platform based on the Internet of Things. The construction of Sifang logistics information platform integrates logistics resources, realizes the integration of logistics government services and logistics business services, and promotes the development of informatized, standardized and intelligent logistics enterprises and logistics industries.
②Smart trade: Support enterprises to carry out e-commerce activities such as online inquiry, online procurement, online marketing, and online payment through self-built websites or third-party e-commerce platforms. Actively promote the use of e-commerce means in modern service industries such as commercial service industry, tourism exhibition industry, and intermediary service industry, innovate service methods, and improve service levels. Combined with the establishment of the physical market, actively promote the construction of online e-commerce platforms, encourage the development of industry-based public information service platforms with e-commerce platforms as the aggregation point, cultivate and develop e-commerce enterprises, and focus on the development of integrated product display, information release, transaction, and payment. An integrated e-commerce enterprise or industry e-commerce website.
③ Build a demonstration and promotion base for smart service industry. Actively through the in-depth application of informatization, transform the operation, management and service models of the traditional service industry, and accelerate the transformation to the intelligent modern service industry. Combined with the development status of the city's service industry, accelerate the development of modern service industries such as modern finance, service outsourcing, high-end business, and modern commerce.
Construction of Smart Health Security System
Focus on promoting the construction of the "digital health" system. Establish a health service network and urban community health service system, build an information platform with the city's regional health information management as the core, and promote communication and interaction between the information systems of various medical and health units. Focusing on hospital management and electronic medical records, establish electronic health records for residents in the city; focus on realizing hospital service networking, promote the construction of smart medical systems such as remote registration, electronic charging, digital telemedicine services, and graphic and text medical examination and diagnosis systems, and improve medical care. and health service levels.
Smart transportation
Build a "digital transportation" project, improve the monitoring system and information network system of public security, urban management, and highways, and establish traffic guidance, emergency command, intelligent travel, taxi and bus management through technologies such as monitoring, monitoring, and traffic flow distribution optimization. and other systems as the focus, the construction of a unified intelligent urban traffic comprehensive management and service system, realize the full sharing of traffic information, real-time monitoring and dynamic management of road traffic conditions, comprehensively improve the monitoring and intelligent management level, and ensure traffic safety , smooth.
Based on the three listed companies with the highest total market capitalization in the smart city sector of the iFinD database, the revenue cost analysis is carried out.
Table Hikvision (stock code: 002415.SZ) revenue and cost analysis (unit: 100 million yuan)
Source: Asset Information Network Qianji Investment Bank Oriental Fortune Network
Table Fii (stock code: 601138.SH) revenue and cost analysis (unit: 100 million yuan)
Source: Asset Information Network Qianji Investment Bank Oriental Fortune Network
Table ZTE Corporation (stock code: 000063.SZ) revenue and cost analysis (unit: 100 million yuan)
Source: Asset Information Network Qianji Investment Bank Oriental Fortune Network
2.3 Technology Development
According to iFinD data, there are 180 listed companies in the smart city sector. Among them, the top three companies with the number of patent authorizations are ZTE, Foton Motor, and Inspur Information, and the corresponding number of patent authorizations are 53,032, 7,566, and 6,783 respectively.
Table Total number of patents of some listed companies in the mobile Internet sector (updated to 2023.3.10)
Source: Qianji Investment Bank iFinD
2.4 Policy and Regulation
The competent authority for smart cities is the Ministry of Housing and Urban-Rural Development. The Ministry of Housing and Urban-Rural Development, as one of the main ministries and commissions that implement smart city pilots, its main responsibilities include: establishing a scientific and standardized engineering construction standard system; supervising and managing the construction market and regulating the behavior of all parties in the market; researching and formulating policies and plans for urban construction and guiding implementation , to guide the construction of urban municipal public facilities, safety and emergency management; to formulate policies, rules and regulations for construction project quality, construction safety production and completion acceptance filing, and to supervise their implementation.
The self-regulation and management functions of industries related to smart city construction are also undertaken by the China Software Industry Association. At the same time, the China Smart City Industry and Technology Innovation Strategic Alliance and the Smart City Working Committee also play a role in supervising and regulating the industry. The China Construction Industry Association Intelligent Building Branch is a self-regulatory organization for the intelligent building industry.
Industry-related policies include "National Smart City Pilot Interim Management Measures", "Opinions on Strengthening and Improving the Management of National E-Government Project Construction", "New Smart City Evaluation Index", "Smart City Evaluation Model and Basic Evaluation Index System Part 1: Overall Framework and Sub-item Evaluation Index Requirements", "Smart City Evaluation Model and Basic Evaluation Index System Part 3: Information Resources", "Smart City Technical Reference Model", "Basic Regulations on Spatial-Temporal Infrastructure of Smart City", "Evaluation of Spatial-Temporal Infrastructure of Smart City Index System", "Smart City Terminology", "Smart City SOA Standard Application Guide", "Smart City Software Service Budget Management Specification", "Smart City Top-Level Design Guide", etc.
Chapter 3 Industry Valuation and Global Leading Companies
3.1 Comprehensive financial analysis and valuation methods of the industry
Figure Smart City [US] Index Historical PE/PB
Source: Qianji Investment Bank Asset Information Network iFinD
Figure Smart City [HK] Index Historical PE/PB
Source: Qianji Investment Bank Asset Information Network iFinD
Figure Smart City Index Historical PE/PB
Source: Qianji Investment Bank Asset Information Network iFinD
The smart city index valuation method can choose price-earnings ratio valuation method, PEG valuation method, price-to-book ratio valuation method, price-to-cash ratio, P/S price-to-sales ratio valuation method, EV/Sales market-to-sales ratio valuation method, RNAV Revaluation net asset valuation method, EV/EBITDA valuation method, DDM valuation method, DCF discounted cash flow valuation method, NAV net asset value valuation method, etc.
Table Valuation indicators of some listed companies in the smart city sector (updated to 2023.3.10)
Source: Qianji Investment Bank Asset Information Network iFinD
3.2 Industry development and price-driven mechanism and risk management
There are two driving forces to promote the gradual formation of smart cities. One is the new generation of information technology represented by the Internet of Things, cloud computing, and mobile Internet, and the other is the open urban innovation ecology gradually nurtured in the knowledge society environment. The former is a technological factor at the level of technological innovation, and the latter is a socioeconomic factor at the level of social innovation. From this we can see the driving role of innovation in the development of smart cities. Professor Meng Qingguo, secretary and deputy dean of the School of Public Administration of Tsinghua University, pointed out that the new generation of information technology and innovation 2.0 are the two major genes of smart cities, and both are indispensable.
With the continuous development of information technology, the application level of urban informatization has been continuously improved, and the construction of smart cities has emerged as the times require. Building a smart city is of great significance in achieving sustainable urban development, leading the application of information technology, and enhancing the city's comprehensive competitiveness.
The significance of the construction of a smart city
Source: Qianji Investment Bank Asset Information Network Baidu Encyclopedia
3.3 Competition Analysis
The "Evaluation Report on the Development Level of China's Smart Cities" shows that the development level of smart cities in the following major cities is at the leading level in the country:
Figure China's Smart City Competitive Landscape
Source: Qianji Investment Bank Asset Information Network Baidu Encyclopedia
3.4 Important Competitors in China
List of listed companies in the smart city sector (updated to 2023.3.10)
Source: Qianji Investment Bank iFinD
1. Hikvision (002415.SZ): Hikvision is an intelligent IoT solution and big data service provider with video as its core. The cooperative ecology provides services for users in the public service field, enterprises and small and medium-sized enterprises, and is committed to building smart cities and digital enterprises that integrate cloud and edge, things and information, and digital intelligence.
2. Fii (601138.SH): The company is a world-leading professional design and manufacturing service provider of communication network equipment, cloud service equipment, precision tools and industrial robots, providing customers with new forms of electronic equipment products centered on the industrial Internet platform Smart Manufacturing Services.
3. ZTE Corporation (000063.SZ): ZTE Corporation is the world's leading provider of integrated communication information solutions, providing innovative technology and product solutions for global telecom operators, government and enterprise customers and consumers. ZTE is committed to building the core competitiveness of independent innovation in the 5G era, and will accelerate the deployment of global 5G commercial scale with its leading 5G end-to-end full range of products and solutions.
3.5 Global Key Competitors
Table Smart City [US] Index listed companies ranked by total market capitalization (updated to 2023.3.9)
Source: Qianji Investment Bank iFinD
1. Google (NASDAQ: GOOGL): Alphabet Inc. (formerly Google, Google, Inc.) was founded in 1998 and is headquartered in Mountain View, California, USA, with 144,056 full-time employees. It is a leader in the technology industry in the United States and the world. It is the world's largest search engine company, the world's second-ranked robot company (sold), Android system developer, global driverless technology and virtual reality technology leader, quantum computer development company, etc. Alphabet also owns heavyweight investment institutions, including growth capital investment fund CapitalG, and Alphabet's venture capital firm GV.
2. Microsoft Corporation (NASDAQ: MSFT) was established in 1975 and is headquartered in Redmond, Washington, with 163,000 employees worldwide. It mainly focuses on R&D, manufacturing, licensing and providing a wide range of computer software services . Microsoft is currently the world's largest provider of computer software, and its most famous and best-selling products are the Microsoft Windows operating system and the Microsoft Office series of software.
Chapter Four Future Industry Outlook
Smart city is the trend and direction of urban development, and it will be more widely used and promoted in the future. The following are several prospects for the future development of smart cities:
more intelligent
In the future, smart cities will achieve a higher degree of intelligence, including the application of technologies such as artificial intelligence, big data, and the Internet of Things. This will promote the digitalization, intelligence and efficiency of urban infrastructure and public services, and improve urban governance and service levels.
Co-construction and co-governance are more emphasized
In the future, the construction of smart cities will pay more attention to joint construction and governance, emphasizing the cooperation and collaboration of the government, citizens, and enterprises, and promoting the democratization, transparency, and convenience of urban governance. This will promote the development of the city's social economy and improve the quality of life and happiness of citizens.
Green and sustainable development is more important
In the future, the development of smart cities will pay more attention to green and sustainable development, adopt more renewable energy and energy-saving technologies, and realize low-carbon and environmental protection of cities. This will help improve the urban environment and reduce the consumption of natural resources, and promote sustainable urban development.
Smart city standards are more uniform
In the future, the development of smart cities will pay more attention to standardization and standardization, and promote the formulation and unification of smart city standards. This will facilitate the intercommunication and exchange of smart city technologies and applications, and improve the efficiency and quality of urban services and governance.
my country's smart city construction has entered a new stage of smart city development that is people-oriented, results-oriented, coordinated and intensive, and collaborative innovation. The driving factors for the development of smart cities have also changed from emerging technology-driven to data-driven. At this stage, there are three main challenges facing smart city construction, namely how to break data silos, improve economic efficiency, and ensure information security.
Figure Smart City Construction Challenges
Source: Asset Information Network Qianji Investment Bank Yiou Think Tank
China Academy of Information and Communications Technology pointed out that the development direction of smart cities and related industries in the future should mainly focus on the following five aspects:
- Strengthen the integration and mutual promotion of industry and city, and realize the equal emphasis on external drainage and local hematopoiesis
- Problem-oriented open scene, attracting multiple subjects to promote the quality and efficiency of the industry
- Release technology and data dividends, tap profit points, comply with innovative business models
- Strengthen the overall operation of the city, cultivate new operators and optimize the business environment
- Actively develop in a group to go overseas, build a digital silk road empowered by smart industry ecology
In short, the development of smart cities in the future will pay more attention to intelligence, co-construction and co-governance, green sustainable development and standardization, so as to promote the digitalization, intelligence and efficiency of urban governance and services, and improve the quality of life and happiness of citizens.
Cover Photo by Conny Schneider on Unsplash