Main points of investment:

For the first time, the overweight rating is given, with a target price of 91 yuan and a space of 64%. The market thinks that the company's performance lacks explosive power, but we expect the successful launch of the "Jilin-1" commercial remote sensing satellite, which marks China's entry into the commercial satellite era, and speeds up the pace of the company's CMOS satellite application, which will greatly exceed market expectations. It is estimated that in 2015-17, the company's EPS will be 0.430.62 and 1.00 yuan respectively, with a growth rate of-12.2%, 44.2% and 61.3%. The company will be granted 147x PE in 2016, with a target price of 91 yuan.

The commercial small satellite intensive launch plan from 2016 to 2020 exceeded market expectations. Benefiting from the strong policy support for commercial satellites, Jilin Province plans to launch an average of 11 commercial satellites per year from 2016 to 2020. The on-board imager with CMOS as the core is expected to increase revenue by about 1-150 million yuan a year.

The company relies on the platform advantages of Optics and Machinery Institute and avoids the traditional market, CMOS business is expected to blowout. The market is worried that the traditional market of CMOS is becoming saturated and the company lacks competitiveness, but we believe that: 1) the CMOS image sensor developed by subsidiary Changguang core and world-class CMOS process OEM leader TowerJazz has reached the international leading level. 2) CMOS has been monopolized by giants such as Sony Group Corp and Samsung in the smartphone imaging market, but we believe that the company's competitive advantage and explosive potential in military and high-end civilian markets such as satellite applications and industrial machine vision are incomparable.

The company is expected to become the optoelectronic integration platform of the Institute of Optics and Machinery and even the Chinese Academy of Sciences. 1) the Institute of Optical Machinery is one of the largest research institutes of the Chinese Academy of Sciences, with revenue equivalent to more than 3 times that of the company. According to the promise: any amount of military products used for scientific research purposes will be injected into the company after delivery. 2) with the opening of the classification reform of the Chinese Academy of Sciences, we expect the company to become an optoelectronic business integration platform, exceeding market expectations.

Catalyst: the volume of CMOS orders; the strengthening of satellite industry policy; the acceleration of CAS reform.

Risk hint: government support for commercial satellites is not as strong as expected, and military orders fluctuate greatly