As an important part of the digital economy, the geographic information industry has great potential and space in the integration with other fields and technologies, and is constantly producing new services and new formats, providing new impetus for economic and social development.

The content, service and characteristics of geospatial space depend largely on the scene, audience and geographical location, but generally include the following factors:

In a location-based world, the emergence of new technologies, changes in ecosystems, and the impact of scale effects all promote the continuous evolution of content acquisition, processing and dissemination. Geospace is the intersection of the real world and the digital world. Once there is a gap between the two, the consumer experience will decline, for example, resulting in useless waiting and improper travel time, disrupting travel plans, irrelevant recommendations or advertising. Liu Jingnan (Academician of the CAE Member) shared the view that "from spatiotemporal information to big data services "Propose that the huge challenges and opportunities brought by AI to various industries are unprecedented and will cause industrial changes in the next 50 years at least.

The innovative development of the geographic information industry must change the way of thinking, establish the thinking of the Internet of Things, big data, and time and space, serve the society through cross-border integration, strive for the initiative in the era of intelligence, and realize the overall transformation of green and intelligent. With the progress of science, human beings have to The demand for information is moving from post-real-time to instant, from static to dynamic and high-speed, from rough to accurate and complete, from land to ocean and sky, from region to global, from earth to deep space and universe. The existence of geographic information determines that it will not disappear in the era of intelligence, but it must complete the transformation from informatization to intelligence.

Question 1: How about the growth of geographic information industry?

The global growth rate is about 12.4%, and the domestic growth rate is about 15% - 20%: According to the report of MarketsandMarkets, the global geographic information system (GIS) market size is expected to grow from 8.1 billion dollars in 2020 to 14.5 billion dollars in 2025, with a compound annual growth rate of 12.4% from 2020 to 2025. The average revenue of the five foreign geographic information leaders is about US $3 billion, with an average revenue growth rate of 10-20%. According to the China Geographic Information Industry Report, the scale of China's geographic information output value reached 598.7 billion yuan in 2018, up 15% year on year. According to the prediction of China Market Intelligence Center, China's GIS software market will reach 32.1 billion yuan in 2021. The revenue growth of 8 domestic geographic information enterprises was about 40-80% in 2015-2016 and about 10-30% in 2017-2019. China's GIS industry has a huge market. According to the intelligence research consulting data, the market size of China's GIS industry was 761.58 billion yuan in 2018, with a year-on-year increase of 26.67%, and the annual compound growth rate from 2013 to 2018 was 25.28%. The National Geographic Information Industry Development Plan (2014-2020) proposes that the development goal of China's geographic information industry is to maintain an average annual growth rate of more than 20%, with a total output value of more than 800 billion yuan in 2020. In the field of GIS software, according to the data of China Market Intelligence Center, the size of China's GIS software market in 2015 was about 16.2 billion yuan.

According to the data of CIC, China's GIS software market is expected to reach 32.1 billion yuan in 2021. In February 2019, the Ministry of Natural Resources issued the Technical Outline for the Construction of the Space-time Big Data Platform for Smart Cities (2019), which further confirmed the Space-time Big Data Platform as the basic support for the construction and operation of smart cities. In June 2019, the Ministry of Natural Resources issued the Notice on the Comprehensive Development of Territorial and Spatial Planning to comprehensively launch the preparation, approval and implementation management of territorial and spatial planning. According to the public data, the market size of China's land space planning is 24.585 billion yuan.

Question 2: What is the business model and competitive pattern of the geographic information industry?

The industry mainly obtains orders through bidding, and the customers are mainly government agencies and public institutions. The market of GIS software industry is relatively scattered and the degree of market concentration is low. From the perspective of enterprise scale, it is small and scattered. In 2019, the overall scale of the top ten enterprises in China's top 100 geographic information enterprises is about 1 billion to 3 billion, and the income scale of other enterprises is less than 1 billion. Among the top 100 enterprises, Beidou Xingtong ranks the first. Its main business is navigation positioning and location services, with operating revenue of less than 3 billion yuan. Several other companies, such as China Coal Aerial Survey, Gaode Cloud Map and Four-Widen, also provide electronic maps and other geographic information services. According to the report of China Geographic Information Industry Association, the largest enterprises in the industry account for only 0.5% of the industry, and the total revenue of the top 100 enterprises accounts for about 7% of the industry. In the third national land survey bidding, as of January 2019, a total of 1105 independent suppliers and 79 consortiums had become the winning suppliers, of which the number one was Chaotu Software with the winning amount of 273 million, accounting for 2.28% of the total winning amount.

Question 3: What are the barriers and competitive advantages of the geographic information industry?

Industry leaders have advantages in technology, research and development, qualification, localization services, and segmented applications.

• Technical barriers: It needs the ability to process and analyze massive spatiotemporal data and remote sensing monitoring and analysis, and needs to integrate cutting-edge technologies. The R&D expenditure of several leading domestic companies accounts for about 10%, and the R&D personnel accounts for about 20-30%.
• Qualification barrier: The qualification certificate is the industry entry threshold. By the end of 2018, there were 19725 qualified units in the country, of which 1144 had Grade A qualification, accounting for only 5.80%. Hypermap software, Guoyuan Science and Technology, etc., were certified as the most advanced Grade A surveying and mapping qualification in the country.
• Barriers to regional relations: small enterprise customers are distributed in a decentralized manner with headquarters as the center, and have certain advantages in the market; More than 90% of the largest bid-winning suppliers of the provincial projects in the Third Land Transfer Project are local suppliers.
• Subdivision advantages: Digital Tongtong leads the way to become a professional supplier of smart city, and many enterprises develop smart city segmentation products and services; GIS+BIM+big data application new scenario, and hypergraph software is the first to enter the digital twin city; Small-scale enterprises aim at the characteristic sub-sectors of the grass-roots market, and smart agriculture and UAV mapping development layout. According to Accenture research, at present, the development of geographical space is entering a new stage, that is, the third wave (Where 3.0), which is characterized by an increase in investment in the order of magnitude, and a large number of new participants continue to pour in.

Question 4: What is the financial situation of the leading companies in the industry?

In terms of the domestic market, among the 8 companies, Chaotu Software and Digital Connect have a large scale, with a revenue of more than 1 billion yuan, and the revenue of the smaller companies is about 1-3 billion yuan, with a growth rate of 10-20%; The net profit attributable to the parent company of Chaotu Software and Digital Tongtong is more than 100 million yuan, while the net profit attributable to the parent company of other companies is about 20-50 million yuan, with a large gap in growth, which is in the range of 10-50%.

• In terms of gross profit margin, the gross profit margin of domestic companies remained stable at 40-60%, mainly due to the high gross profit margin of software business. With the intensification of competition, the overall gross profit margin of the industry declined.
• In terms of cash flow, the cash flow of larger enterprises, such as Hypergraph Software and Digital Connect is good, while the cash flow of smaller enterprises is poor, which is greatly affected by contracts and orders, and is prone to negative cash flow. The overall cash flow of the industry is cyclical. Industry customers are mainly government agencies. The signing and acceptance of formal procurement contracts are usually conducted in the second half of the year, so the payment collection is mainly concentrated in the second half of the year.
• In terms of accounts receivable, in terms of the proportion of accounts receivable in total assets, the proportion of hypergraph software is relatively low, and that of other companies is relatively small and higher, with accounts receivable accounting for about 40-70%. Compared with 2015, the proportion of accounts receivable of each company in 2019 increased slightly, mainly due to the increase of accounts receivable due to the increase of operating income. From the perspective of the turnover rate of accounts receivable, the overall collection rate of the industry is relatively slow, mainly because the customer acceptance and payment approval processes are relatively strict, and the enterprise scale is small, the bargaining power for customers is poor, and the collection force is not enough; The payment collection speed of hypergraph software is fast. In terms of asset-liability ratio, the industry as a whole is in the range of 20-50%. Compared with 2015, the asset-liability ratio of each company in 2019 has declined to a certain extent.

Summary: move forward with caution

When thinking about how to grasp the new opportunities brought by geographic information, enterprises need to carry forward the spirit of pragmatism and make careful planning to avoid hot heads and impulsive actions. In order to ensure the establishment of long-term advantages, enterprises should at least consider the following key factors in their design: user expectations, privacy, localization, flexibility, asset acquisition, and system deployment plan.

• Information quality plays a particularly important role in geospatial-related services. When the digital world is inconsistent with the real world, consumers can easily find it, and the feedback period of consumer experience is very short, such as geospatial experience including real-time traffic and waiting time.
• Personal location data is very valuable and sensitive. Even anonymous data can be used to infer personal behavior and identity. Therefore, enterprises need to ensure the security of location data, the appropriateness of use, and obtain clear permission. In the field of geospatial, it is more important to strengthen the supervision of data privacy.
• The development of the digital world is changing rapidly. It is estimated that 10% - 15% of the road network changes every year; In 2017, on average, 21 large retail stores closed in the United States every day; In the past 30 years, China's urbanized population is more than that of the United States combined.
• It is crucial to have more real-time data or to master specific consumer data assets. If competitors can only update the changes of geographical space on a monthly basis, then updating information on a daily or hourly basis will become an important advantage for enterprises. When existing assets are insufficient to support the expansion of new markets, enterprises may need to invest to create assets. If the use of third-party services may enable competitors to obtain user data, even if the operation is anonymous, the enterprise may also face risks that it cannot afford. The development of geographic information is changing with each passing day. From the vast indoor space to the high-level UAV world, to the smart city, many new fields are waiting for us to explore. And each of these fields contains new opportunities, which can release the potential of geographic information. The value of geographic information has risen to an unprecedented level. Robust strategy and strong execution ability are also of unprecedented importance for large-scale operation.