Optoelectronics is a scarce target for pure information-based military stocks. Most of its revenue comes from military goods. Its products cover optoelectronic measuring and control instruments, optical materials, optoelectronic devices, and grating sensing products. It is an industrialization platform for the Institute of Optoelectronics of the Chinese Academy of Sciences. The company's optoelectronic measurement and control instrument products are industry leaders, with a market share of as high as 30%.

Key points of investment:

The company is an industrialization platform owned by the Institute of Optoelectronics of the Chinese Academy of Sciences. The Institute of Optoelectronics is one of the largest research institutes of the Chinese Academy of Sciences and has strong scientific research capabilities. According to the promise, any military product used by Optoelectronics for scientific research purposes will be injected into listed companies after mass production.

The company is a scarce target for pure information-based military stocks. The company's optoelectronic measurement and control instrument products are industry leaders, with a market share of as high as 30%. Optoelectronic measuring and control instruments mainly include optoelectronic latitude and longitude meters, aviation/space cameras, television angle finders, radar antennas, etc. They are widely used in various fields of national defense informatization, and are key equipment for national defense informatization.

The company has many products to fill the gaps in the country. The company relies on the Institute of Optoelectronics of the Chinese Academy of Sciences, and various products break foreign monopolies and fill domestic gaps. The company is the only supplier of high-end CMOS chips in China, a leader in absolute optical scales, and the pioneer of the first domestic airport pavement foreign matter detection system.

Profit forecasting and valuation. Based on conservative expectations, we assume that the company's military orders remain at the level of 2015 and that the pace of advancing the industrialization of civilian goods continues at the level of 2015. We expect EPS in 2016-2018 to be 0.34, 0.52, and 0.53 yuan respectively, corresponding to PE in 2018 99 times. Considering that the company is a scarce target for information-based military stocks, military goods orders are likely to exceed expectations in the context of accelerated informatization construction, and a recommended rating was given.

Risk warning: military orders fluctuate, the company's industrialization of new products is blocked, and the expansion of the civilian products market falls short of expectations