Events:
According to the announcement, the core military products of China Optics Company acquired by the company have been listed in a number of models, and the actual performance of China Optics in 2018 has greatly exceeded the performance commitment.
Main points:
1. There is a huge demand for individual equipment in the future, and there is a big gap between China's individual equipment and the world's advanced level.
With the reduction of combat intensity in the new century and the development of individual tactics and equipment, the modern army must consider a large number of traditional infantry operations. Individual soldiers are mainly used for reconnaissance, theft, blasting, communications, intelligence, long-term latent operations, special mission operations, and so on. The US special forces have a wide variety of individual equipment with excellent performance, such as helmets from MICH to FAST and combat equipment from MLCS to SFLCS and SPCS tactical vests. On the other hand, the Russian army occupies a very important position in the field of traditional individual weapons, and its unique development concept is not to weaken the original superior technology. Take the soldier system as an example, the United States pursues high-tech content, and after continuous evaluation and actual combat testing, its "Knight Warrior" has been simplified to a system with handheld intelligent terminals and handheld radios as the core, and the weight of the system has been greatly reduced. The convenience of operation has been improved. The Russian "soldier" soldier system pays more attention to improving the protection capability of the system and the strike capability of weapons, but there is a gap in the fields of situational awareness and information fusion.
In recent years, with the growth of economic strength, the weapons and equipment level of our army has developed steadily. Among them, the category of individual equipment continues to increase, and its performance has been greatly improved, gradually forming a relatively complete equipment system with the combination of self-defense, assault attack, fire support and suppression, attack and anti-armor, and defense against low altitude.
2. Informationization is the equipment with the highest technical content and the most expensive among the individual equipment of the US military.
Take the US military's "Marine Warrior" individual combat system as an example, its system structure is composed of five major parts and more than 20 small and medium-sized components: first, an integrated helmet system: it mainly includes helmets and suspension devices, video-enhanced image intensifiers, flat panel displays, handsets (artificial ears), protective masks, miniature cameras, audio-visual and respiratory support devices, and so on, with a total weight of 2.3 kilograms. Second, detectors, computers and radio systems. The weight of this part of the device is less than 500 grams. Third, weapon systems, including individual self-defense weapons, individual combat weapons and team support weapons, with a total weight of 26.4 kg. Fourth, multi-purpose clothing system: including military uniforms, bulletproof vests, rucksacks, bullet bags, gloves, combat boots, etc., weighing up to 7.6 kg. Fifth, microclimate and power plant system: including micro-refrigeration system and power plant, weighing up to 4.5 kg.
According to the Internet, informationization is the most technical and expensive equipment among the individual equipment of the US military. These information equipment include night vision ($4000), military tablet computer ($10,000), military individual radio ($6000), scope ($900,900), laser rangefinder ($2000), etc., as well as some logistics equipment. For example, individual medical kits ($200,200), ILBE knapsack systems ($550,550), military rations ($100,100), enhanced infantry are also equipped with individual bazookas ($900,900), and a set of individual equipment for the United States military may be worth more than $180000.
3. The core products of China Optics have been installed in batches with many models, and there is a huge market space downstream. At present, China Optics is developing more than a dozen new products and technologies, including various types of low-light sight, infrared sight, integrated telescope, photoelectric detection and interference devices, automatic calibration devices, intelligent applications and intelligent security integrated management platform systems.
According to the company announcement, 1. In terms of low-light-level products: China Optics successfully applied the near-paste super second-generation domestic image intensifier to gun low-light-level sight for the first time in 2000, achieving a substantial reduction in weight and volume, and is now equipped with a number of models. two。 Infrared products: in 2006, China Optics first applied infrared imaging technology to the development and production of infrared gun sight for light weapons, and now it has the research and development capability of its core circuit infrared drive components. a variety of uncooled detector imaging components have been developed and produced, and have been applied to new military main combat equipment. 3. Laser products: China Optics has been engaged in the research and development of laser and laser ranging products for a long time. At present, it has mastered laser manufacturing, laser ranging, laser suppression jamming system and other technologies, and applied to the military's new main combat equipment.
After the disarmament, the size of our army is about 2 million. We assume that the price of night vision equipment is 50,000 yuan and the price of sight scope is 20,000 yuan. Based on the estimation that 10% of our troops are equipped with night vision equipment and sight sight, the market size of night vision equipment and sight sight adds up to 14 billion yuan. In addition, tank armor series, artillery and calibration target system are also important application fields of sight.
4. China Optics has exceeded its performance commitment, and the high growth rate of military products has been guaranteed in the two years after the 13th five-year Plan.
In 2018, listed companies realized operating income of 2.584 billion yuan (+ 55.34%), net profit attributable to shareholders of listed companies 162 million yuan (+ 237.74%), and deducted non-net profit of 41.5653 million yuan (+ 8.96%). Among them, China Optics achieved revenue of 1.671 billion yuan (+ 107.65%) and net profit of 90.4561 million yuan (+ 298.83%) in 2018. The parent company of China Optics achieved a deduction of non-parent net profit of 107 million yuan, substantially exceeding its performance commitment (33.8894 million yuan in 2018). The company's revenue in the first quarter of 2019 increased by 23.38% compared with the same period last year. The growth rates of net profit and non-net profit were 198.99% and 197.94%, respectively.
The company's military orders increased significantly in 2018, while the revenue of China Optics's optoelectronic defense and key location monitoring business grew by 147.61% compared with the same period last year. We judge the main reasons: first, the main reasons may be the release of compensatory orders squeezed by the previous military reform; second, new products are loaded into the batch delivery period; third, the military may increase procurement due to some objective factors. Looking forward to the two years after the 13th five-year Plan, we judge that the implementation of compensatory orders and the equipment procurement plan of each five-year plan will steadily accelerate the growth rate of military revenue in 2019 and 2020 on the basis of 2018.
Conclusion:
The company completed the acquisition in 2018 and successfully cut into the lower reaches of the optical defense + optoelectronic industry chain, and may change its name to "China Optics" in the future. China Optical military products have ushered in a high prosperity stage since 2018 and will continue for several years. The civilian products of listed companies have entered Huawei P30 supply chain system and will benefit from the increase in shipments of high-end mobile phones in the future. in addition, the company is the only listed company in the optoelectronic sector of the Armament Group. The expectation of in vitro asset injection is strong. It is predicted that the company's revenue from 2019 to 2021 will be 3.31 billion yuan, 3.876 billion yuan and 4.876 billion yuan, the net profit will be 218 million yuan, 261 million yuan and 338 million yuan, and the EPS will be 0.83,1.00,1.29yuan, corresponding to the closing price PE on May 24, which maintains the "highly recommended" rating.
Risk Tips:
The revenue of military orders was confirmed to be lower than expected; the intensified competition in the civilian products market led to the loss of market share.