Report guide

China reported that satellite navigation revenue increased by 119% compared with the same period last year, continued to increase R & D investment to lay the foundation for future growth, set up a new electronic countermeasures business direction, the future growth forecast is optimistic, and maintain the "buy" rating.

Main points of investment

The profit growth rate is 45%, and the performance is in line with market expectations.

In the first half of the year, the company's revenue was 169 million yuan, an increase of 42.73% over the same period last year; the net profit was 47.8671 million yuan, an increase of 45.44% over the same period last year; and the net profit after deducting non-return was 43.0967 million yuan, an increase of 30.6% over the same period last year.

The gross profit margin in the first half of the year was 61.1%, which was 67.2% lower than that in the same period last year, 6.1pct, mainly due to changes in the income structure. 20Q1-21Q2's single-quarter gross profit margin was 63%, 74%, 56%, 62%, 60%, 61%, and stabilized in the past three quarters.

The revenue of satellite navigation business increased by 119% compared with the same period last year.

Since the end of 2018, with the gradual landing of the military reform and the growth of market demand, the company has strengthened the allocation of resources, actively expanded industry customers, strengthened R & D management, developed new products, and expanded the capacity of serialized products. Satellite navigation revenue in the first half of the year was 126 million yuan, an increase of 118.72% over the same period last year. During the 14th five-year Plan period, national defense expenditure focuses on the direction of information and intelligence, and the company's products are mainly oriented to the missile and other weapons and equipment market, and its growth continues to be optimistic.

In the first half of the year, the company regards electronic countermeasures as the strategic development direction, and sets up the electronic countermeasures business department, which is expected to further open up new growth space. In the research project, it is mentioned that there are two electronic countermeasure projects based on DRFM fast forwarding jamming technology and millimeter wave power synthesis technology in the stage of technology development, and the technology level is leading in China.

In the first half of the year, satellite communications revenue totaled 43 million yuan, down 29.00 percent from the same period last year, mainly due to a sharp decline in overseas revenue compared with the same On the one hand, overseas markets are expected to restore demand with the alleviation of the epidemic in the future. in addition, the accelerated development of domestic high-throughput satellites and satellite Internet industries in recent years is also expected to bring development opportunities for the company.

Increase investment in research and development to lay the foundation for future growth

In the first half of the year, the company's R & D expenditure was 25.6756 million yuan, an increase of 47.50% over the same period last year, and the R & D expenditure rate was 15.16% higher than the same period last year, mainly due to the increase The number of R & D personnel in the first half of the year was 139, up 44% from 97 in the same period last year, up from 33% to 36%, compared with 118 at the end of last year.

Profit forecast and valuation

From 2021 to 2023, the company is expected to make a profit of RMB 1.57 million and 223 million yuan, and the current price of PE is as much as that of 57-40-29. The company has a scarce position in the industrial chain, has core technology and customer advantages, has great performance flexibility, and maintains a "buy" rating.

Risk tips: increased competition leads to lower gross profit margin of products; customer expansion and order acquisition are not as expected.