Announcement: the company won the bid Ericsson 5G with an increase of 275%, which is the core supplier of 5G signal transmission.
According to the announcement on December 6, the company successfully won the overseas tender for (4G/5G) base station materials in 2019, with a winning amount of US $60 million, an increase of more than 200% compared with last year (the winning amount is about US $16 million). It is estimated that the capital expenditure of 5G in China is as high as 1.5 trillion yuan. High-frequency and high-speed transmission equipment will become the first link in the whole industry chain. Cigna now covers 5G wireless main equipment and transmission equipment, as the core supplier of multi-variety connection products for 5G high-frequency and high-speed signal interconnection. the company is expected to fully benefit the development space of the 5G communications industry.
With electromagnetic compatibility technology as the core in the information age, the main industry of high-frequency and high-speed interconnection of Cigna has ushered in an inflection point.
Entering the information age, the demand for high-frequency and high-speed signal transmission is constantly infiltrating into communications / military electronics / intelligent manufacturing and other industries, resulting in multiple complex electromagnetic environments, resulting in a huge demand for the electromagnetic compatibility (EMC) capability of equipment. The electromagnetic compatibility technology of complex electromagnetic environment has become the core of signal interconnection enterprises in the new stage. With the communication entering the 5G era and the military industry entering the inflection point, the company's business-module and subscriber line, high-frequency and high-speed PCB, RF chip business has improved steadily and rapidly. The company's product structure continued to be iteratively optimized, with revenue of 1.93 billion in the first three quarters of 18, + 19.2% year on year, and net profit of 111 million yuan, a significant improvement compared with 2017, and the performance entered an obvious inflection point.
Jinxinuo is an old high-frequency and high-speed signal interconnection enterprise, and its gross profit margin is 7.74% higher than that of traditional suppliers.
Jinxinuo is a veteran EMC signal interconnection enterprise in China, which is located in the first echelon of signal interconnection system-level suppliers in China, and its gross profit margin is 7.74% higher than the average value of the second echelon traditional signal interconnection sample company. As the holder of EMC core technology and signal interconnection system-level provider, the competitive advantage of high bargaining power is significant. The shareholder Arms Industry Group increased its holdings of the company's shares in Q3, and the integration of the army and the people hopes for long-term sustainable development.
The military industry has entered a high economic cycle, and the three major military businesses are expected to continue to benefit from the economic inflection point.
As of December 6, the military's weapons and equipment procurement information network has released a total of 1440 military supporting bids, a substantial increase of 958.8% compared with the 136 times in the whole of last year, and the military industry has entered a period of high prosperity. Cigna's existing three major military services include military signal interconnection system, underwater integrated defense system, radar TR radio frequency chip. Since 2008, the company has gradually realized the matching of major national projects such as radar / early warning aircraft / third-generation aircraft / helicopters / missiles and launch equipment / submarines, and the prototype products of the underwater integrated defense system have been publicly unveiled. Radar RF chip has achieved phased array radar matching, the three major directions are expected to enter the release period at the same time. At the same time, in terms of the entry threshold for military industry, in addition to the company's system-level qualifications, the company has established joint ventures with the Ninth Nuclear Academy and AVIC and made considerable profits, and the Arms Industry Group is one of the top 10 shareholders of the company. the company will benefit from the deep integration and development opportunities opened by supporting access for private enterprises. At present, in the open pre-research, civilian military enterprises have significant advantages in cost and efficiency, and are expected to take the lead in achieving breakthroughs in the three major fields of military equipment signal interconnection, underwater equipment and chips.
Profit Forecast and rating: the company's revenue in 18-20 years is estimated to be 27.21 million RMB 3.673 billion yuan respectively, the net profit is 1.53 billion RMB 2.52pm 324 million yuan, and the PE is 36.24 pm 21.98pm 17.10x. According to the comparable valuation, the company is given 1.05x PEG with a target price of 12.8 yuan per share, with a buy rating for the first time.
Risk hint: 5G commercial landing slows, communicators' capital expenditure falls short of expectations, military sales are confirmed to slow, and order growth falls short of expectations.