Main points of investment
Event: on December 8, Wantong Development issued an announcement that at the request of the company's holding subsidiary Beijing Taiji Tonggong Electronic Technology Co., Ltd. to sign the "Frequency Project Business Cooperation Agreement" with a certain unit, it is proposed to invest 500 million yuan to set up a wholly-owned subsidiary of communications business to ensure the smooth progress of the frequency cooperation project.
The subsidiary signed the frequency project business cooperation agreement to further facilitate the strategic transformation: Wantong Development subsidiary signed the "Frequency Project Business Cooperation Agreement" with a unit, which is expected to further expand the 5G application scenario. On June 9, 2022, Wantong Sheng'an became executive vice chairman of the Institute of Digital Research. Relying on the Beijing Wantong Institute of Technology and the Institute of Digital Research, it will jointly invest scientific research resources to carry out special research on three cutting-edge digital economy topics, including but not limited to 5G private network scenarios and applications, low-altitude economic industry, satellite and ground-to-air Internet, which will also help Wantong to accelerate the expansion of new applications. Recently, the Ministry of Industry and Information Technology said that it has issued the first enterprise 5G private network frequency license to Comac, which is the industrial wireless dedicated frequency band of 5925-6125MHz and 24.750-25.15GHz, which has technical advantages such as high speed and low delay. The release of frequency license will also promote the development of Comac in the 5G industrial Internet. We believe that the signing of this frequency project business cooperation agreement also represents Wantong's development to continuously promote the strategic transformation of communications and digital technology, and is expected to accelerate its expansion in the field of 5G applications.
Two strategic technology fulcrum, help 5G and earth orbit satellite communication business layout: Wantong Sheng'an and Zirong Technology are important strategic technology fulcrum for the company's communications and digital science and technology strategic transformation. Wantong Sheng'an is committed to 5G base station western phased array antenna and Leo satellite base station sparse phased array antenna. at present, the company's "Ka band ultra-sparse non-harmonic phased array antenna" project has won the Information and Communication Institute "Science and Technology Achievement Evaluation report" and related certificates, and gives the overall domestic leading and international advanced evaluation in the industry. Zhirong Technology is committed to providing high-performance chip-level solutions for the new generation of flat array antenna systems and millimeter wave communication systems. The team specializes in the development of civil satellite Internet and 5G millimeter wave domestic alternative chips. We believe that the combination of Wantong Sheng'an 's sparse phased array technology scheme with Zirong technology in earth orbit satellite terminal phased array chip and 5G millimeter wave phased array chip to further strengthen the industrial chain layout of Wantong development in satellite Internet.
Profit forecast and investment rating: at present, the company is still in the process of strategic transformation. Based on the latest industrial demand and the company's operating conditions, we have lowered the 2022-2024 net profit from 211 million yuan, 243 million yuan and 285 million yuan to 18 million yuan, 145 million yuan and 215 million yuan respectively. The corresponding PE valuation is 1204X/149X/101X, and we are optimistic about the strategic transformation of Wantong. New businesses such as satellite Internet are expected to drive the company steadily upward and maintain its "buy" rating.
Risk hint: the strategic transformation is not as expected; the project progress is not as expected.