The company is an industry leader in Beidou's high precision and has a long-term growth logic:
Beidou high-precision positioning products have strong technical strength: the company has the first four-channel GNSS RF chip + support satellite-based enhancement chip + high-reliability engine; take the lead in proposing the satellite-based navigation assistance system-China precision series. The accuracy can be as high as centimeters.
Technological advantages lead to an increase in the market share of high-precision RTK products. The company's share of high-precision surveying and mapping products has increased from 2% in 2014 to 20% in 2017, the technical strength has been recognized by the market, and the market share in the RTK field of surveying and mapping is expected to maintain. Combined with Q2 data, we judge that the market share of Hezhong Swift is expected to reach 30% and 35% this year.
In scenarios such as precision agriculture, Beidou Gaojing has room for long-term growth. The scene of agricultural machinery driving and construction machinery self-driving is relatively simple, the surrounding environment is relatively simple, and there are fewer other pedestrians and vehicles designed, so it reduces the possibility of disputes and has a better chance of landing in the next 3-5 years. In order to contribute to performance. We estimate that every increase in the penetration rate of self-driving equipment in the new products of large and medium-sized tractors means a market size of 300 million yuan. The company acquired AgJunction's Outback Guidance business and signed strategic cooperation agreements with Yituo, Dongfeng and other companies.
The short-term volume of ad hoc network service is significant, and the long-term logic remains to be tested over time:
The 2017 annual report revealed that the revenue of the business sector was 577 million yuan, the gross profit margin was 13.8%, and the business order was 2.1 billion yuan. 2018H's performance was in line with high growth expectations, with revenue of 1.62 billion yuan, cumulative orders of 2.501 billion yuan and gross profit margin of 10.7%. Revenue of 2018E is expected to be between 32 and 3.5 billion.
The industry lacks high-tech barriers. At present, there have been a number of listed companies, including Lucky Technology, which have entered this market and obtained a large number of orders. It is expected that the window for rapid market growth will last until 2019 and 2020.
Analysis of valuation level: we expect the company's operating income from 2018 to 2020 to be 5.141 billion yuan, 5.579 billion yuan and 6.036 billion yuan respectively, the net profit returned to its mother is 360 million yuan, 463 million yuan and 599 million yuan, and the EPS is 0.48,0.62,0.80 yuan. According to the valuation of 25 times of EPS in 19 years, the target price is 15.50 yuan.
Recommend for the first time, give a highly recommended rating.
Risk hint
The volume of the new integrated communication business is very large, such as the account period exceeds expectations, which may have an adverse impact on the company's cash flow.