This Friday (September 9), Xinke Mobile, a listed company of Science and Technology Innovation Board, made an inquiry.

Xinke Mobile (688387): the company provides mobile communication network products to domestic and foreign communication operators, and provides 4ramp 5G industry private network communication solutions to vertical industry customers; at the same time, the company has integrated service capabilities for mobile communication network planning, construction and optimization, as well as mobile communication network operation and maintenance services, and provides customized mobile communication technical services for customers. From 2019 to 2021, the company achieved operating income of 4.488 billion yuan / 4.527 billion yuan / 5.666 billion yuan, YOY of-12.86%, 0.87%, 25.15%, and three-year compound annual growth rate of 3.23%. The net profit of homing was-1.637 billion yuan /-17.52 billion yuan /-1.184 billion yuan, and the YOY was-170.49%, 6.98%, 32.43%, respectively, and the loss was gradually narrowed. During the latest reporting period, 2022H1 achieved an operating income of 2.646 billion yuan, an increase of 81.62% over the same period last year, and a net profit of-168 million yuan, an increase of 72.94% over the same period last year. According to the preliminary forecast, the company is expected to achieve a net profit of-330.9498 million yuan to-300.9498 million yuan from January to September 2022, a year-on-year change of 59.73% to 63.38%.

Investment highlights: 1. The company is an early domestic enterprise to carry out 5G standards and basic technology research, and has become one of the leading providers of mobile communication network equipment in the world, and has always been among the best in the comprehensive bidding market; with the continuation of the 5G commercial process, the company's performance is expected to be good. By the end of the reporting period, the company had more than 12000 authorized domestic and foreign patents, submitted more than 15000 5G standard proposals, and participated in the formulation of more than 400 domestic and foreign industry standards; as of September 30, 2021, the company ranks seventh and eighth in the world in terms of the number of 5G patents and the contribution of 5G technology standards. In terms of product development, the company has covered full-band products such as 700M-4.9G and millimeter wave, including a full range of 5G base stations such as macro stations and small base stations, and can implement full-scene networking solutions such as "urban + hot spots + suburbs + rural areas". At the same time, the company also successfully completed three stages of 5G technology test in the world's largest and most well-organized technical test, and ranked in the top three in the comprehensive technical index, indicating that the company's technology has reached the leading level in the industry. With the above advantages, the company has won many bids for wireless main equipment of the four major communication operators in China, and its share continues to rise; and in the latest tender, the comprehensive market share surpassed that of foreign companies Ericsson and Nokia, ranking third. With the continued construction of 5G in the future, the company, as an industry leader, is expected to benefit from it and promote sustained performance growth. 2. The controlling shareholder of the company is China Information Technology, and the actual controller is the State-owned assets Supervision and Administration Commission of the State Council. By relying on the central enterprise background and resource support of the controlling shareholder, China Information Technology, it is helpful to support the stable development of the company's business. As of the date of signing of this letter of intent, China Xinke directly holds 51.27% of the shares of the company and is the controlling shareholder of the company, while SASAC of the State Council is the actual controller of the company by holding 90% of the shares of China Xinke. China Information Science is formed by the joint reorganization of the Academy of Post Sciences and the Academy of Electrical Sciences. It is not only the birthplace of optical communications and the innovation highland of wireless communications in China, but also the core provider of information and communication products and integrated solutions. As the carrier of mobile communication business under China Xinke, the company is the only enterprise in the group engaged in 4G mobile communication system equipment, antenna feeding equipment and room sub-equipment, as well as mobile communication technology services; by relying on China Xinke's central enterprise background and industrial resources support, the company is expected to better grasp the huge market opportunity of the industry private network, expand the business scale and market share in the industry private network.

Comparison with listed companies in the same industry: ZTE Corporation, Tongyu Communications and Shenglu Communications in the field of mobile communication network equipment, as well as Runjian shares and Zhongbei Communications in the field of mobile communication technology services are selected as comparable listed companies of Xinke Mobile. According to the above comparable companies, the average income of the industry in 2021 is 57.954 billion yuan, and the gross profit margin of sales is 28.31%. At the same time, comparable PS-TTM in mobile communication network equipment industry is concentrated in 4X-6X, and comparable PS-TTM in mobile communication technology service industry is concentrated in 1X-2X. In comparison, although the revenue scale of the company is not as large as that of ZTE, it is in the middle and upper reaches of other comparable companies, and its gross profit margin is slightly lower than the industry average.

Risk hint: companies that have started the inquiry process still have the possibility of not being listed due to special reasons, the company content is mainly based on prospectuses and other public materials, and the selection of listed companies in the same industry is not accurate. Risk, content data selection may have interpretation deviation, specific listed company risk is displayed in the text content, and so on.