Since its establishment, the company has been engaged in the research, development, production, sales and related services of phased array radar and related systems. We have mastered the technology of full-polarization active phased array radar, and realized the industrialization of X-band dual-polarization (dual-polarization) active phased array radar earlier, selling products directly to meteorological departments and providing related services to realize revenue and profit. Domestic products account for more than 90% of the core components and materials, and the core technology is independently controllable, reaching the international advanced level as a whole. At present, there are about 10 X-band dual polarization phased array radar research and development units supported by the China Meteorological Administration. Compared with the company's products, the technology added value is high, and the bid winning rate is very high in Guangdong Province. On the whole, the whole radar of the company is the standard and the variety is relatively few for the time being, which is still mainly used in the field of meteorological observation at this stage. It is planned to be gradually promoted in civil scenes such as water conservancy and flood control, civil aviation, marine monitoring, forest fire prevention, public safety and so on.
Radar machine sales contribute most of the revenue, and the historical gross profit margin is relatively stable. From 2019 to 2022, the company realized income of 1.05 won 1.31 won, 183max, respectively, with a compound growth rate of about 26% in 19-22 years; and realized a net profit of 0.71 won, 0.77 pm, and a compound growth rate of 14.1% in 19-22.
At present, the company's overall gross profit margin is stable at about 80%, and the net profit margin is about 50%. Most of the company's income comes from radar machine sales, mainly contributed by Guangdong Province. The company's customers are mainly government departments or institutions, which generally require the service life of the radar machine to be more than 10 years in the bidding, so there is basically no repetition among the customers. Due to the influence of budget management, procurement system, product acceptance and other factors, the company had fewer orders in hand in the first half of the year, and revenue recognition was mainly concentrated in December.
X-band weather radar can make up for the blind area of S-band and C-band weather radar and realize fine detection. China began to build a new generation of weather radar network in the late 1990s, and 270 new generation weather radars have been completed by 2020. At present, Doppler weather radar is mainly used in our country, S-band in the eastern rainy area, C-band in the western region, and X-band polarization radar in the popularizing stage. With the continuous improvement of people's living standards, higher requirements have been put forward for meteorological monitoring and fine forecast. The new generation S-band and C-band weather radar has some limitations, such as insufficient detection ability of lower atmosphere, low resolution, fixed scanning mode and long body scanning period. On the other hand, the X-band weather radar can obtain the three-dimensional monitoring data of rainstorm, hail, tornado and other disaster weather, and make up for the blind area near the ground layer of S-band and C-band weather radar. it has advantages in response speed, target update rate, multi-target tracking ability, resolution, versatility and so on.
Policy is the main driver of demand, and the products are expected to be further promoted in Guangdong Province. The installation of the new generation weather radar network in China has been basically completed, and the X-band weather radar acts as a "complementary board". Assuming that the installation of X-band radar reaches the coverage area of the new generation of weather radar in China, it is necessary to deploy about 1000 (225pm, 60,270). By the end of 2020, the total number of X-band weather radars in China is about 267, mainly traditional mechanical scanning radars. Guangdong Province will build 69 X-band dual polarization active phased array weather radars in 12 prefectures and cities in the province. If the company wins the bid, according to each machine 7 million, it will bring about 500 million revenue for the company.
Comparable company situation: the company is mainly engaged in phased array radar and related system research and development, production, sales and related services. Comparable companies choose the main business including radar complete machine and supporting sales of Situang Electronics, Guorui Technology, Hailanxin.
Risk hints: single product and high price risk; unfavorable risk of sales area and new customer expansion; narrow product application area risk; risk of gross profit margin decline caused by intensified market competition