In October this year, Xuanyu Space and Xuanyu Intelligence, two companies under 502 of the Fifth Aerospace Academy, completed the injection of Kangtuo infrared. Recently, the Fifth Academy bought 5% of the company at a price of 8.91 yuan per share, and promised to use Kangtuo as the main platform in the field of intelligent equipment business in the aerospace technology application industry.
Add aerospace class CPU and nuclear industrial robots to expand the company's business scope and profit space
Xuanyu space and Xuanyu intelligence have high growth. Xuanyu Space's main products are intelligent test and simulation systems and micro-system and control components, including on-chip microprocessors, memory, inertial navigation sensors, microprocessors, motors and so on. It is the largest supplier of aerospace SoC chips and the largest supplier of aerospace SiP system packaging modules in the field of spacecraft core control systems in China. The aerospace CPU developed by the company will benefit from the needs of a number of large-scale low-orbit mobile broadband Internet constellation systems, narrowband Internet of things constellation systems, remote sensing constellation systems and so on. At the same time, Xuanyu Space is also developing "brain" products for weapons and equipment such as wheeled unmanned combat systems, infrared systems, lasers, starlight-visible navigation and guidance products, highly integrated miniaturized missile-borne product modules, and warhead end correction systems. Benefiting from the monopoly position of 502 in the development of spacecraft GNC, especially considering the demand for commercial satellites and the integration and interaction with the material resources department of the five institutes, Xuanyu space is expected to have an average annual compound growth rate of at least 30 per cent in the next three years.
Xuanyu Intelligence applies space robot technology to the field of special robots in the nuclear industry, and its main products include hot chamber automation platform, glove box automation platform, radiation-resistant key devices, detection robot system and power manipulator. At present, in close cooperation with CNNC, the products cover many links of the nuclear industry chain, and a number of major nuclear industry projects ensure that the company's follow-up orders can be increased.
Order driven shows high growth
Xuanyu and Xuanyu are growing rapidly. The net profit of Xuanyu Space increased by 70% year-on-year in 2018 and 50% year-on-year in 2017, mainly due to the rapid growth of chip products with high gross margin. In 2018, Xuanyu space aerospace chip products achieved mass production, the gross profit margin rose to 35%, and the control department components also have the ability to deliver system-level products. In 2018, Xuanyu Intelligent achieved revenue of 108 million yuan, an increase of 79.16% over the same period last year, and a net profit of 8.7865 million yuan, an increase of 713.11% over the same period last year.
According to the related party transactions disclosed by Kangtuo Infrared on October 30, Xuanyu Space and Xuanyu Intelligence expect to sell products to Aerospace Science and Technology Group and other related parties at 469 million yuan and 473 million yuan respectively in 2019. Correspondingly, in 2018, Xuanyu Space sold 276 million yuan to the Aviation Science Group, while Xuanyu Intelligent's total sales revenue in 2018 was only 100 million yuan.
The sharp increase in the value of related party transactions indicates that the growth of the two companies is accelerating.
The follow-up assets of the five institutes are expected to be injected, and the potential "aerospace intelligence control" surfaced. Kantuo infrared is the potential "aerospace intelligence control": the original railway infrared detection products of listed companies and Xuanyu intelligent binocular vision products all belong to the perception link of intelligent equipment. Xuanyu space test and simulation products, controller products, monitoring software products belong to the processing, analysis and storage of intelligent equipment. Xuanyu space drive motor, Xuanyu intelligent manipulator and automatic production line products belong to the implementation of intelligent equipment. Therefore, listed companies are potential high-tech "aerospace intelligent control", and their products run through all aspects of intelligent equipment. The current annual income is 4 billion yuan and the net profit is 400 million yuan. After the completion of the new base in Shunyi, the annual income is expected to be 10 billion yuan. In the five-institute system, 502 high-quality assets are expected to be the first to be injected into Kantuo infrared to drive the injection of intelligent manufacturing assets from other research institutes.
Profit forecast and rating
According to the actual trend of the company's performance in recent years and the situation of railway construction, we expect the annual growth rate of the company's original railway testing business to be in the range of 3% and 4% in 2019. Due to the small volume of the intelligent warehousing system, the growth rate can reach about 10%. The injected Xuanyu space and Xuanyu intelligent new business, taking into account the company's expected increase in the number of related party transactions from October to December this year, and combined with the company's on-hand orders, make certain adjustments on the basis of the original performance commitments and (the new business will be merged in the fourth quarter of this year only).
The converted growth rate for 2019 is as follows: intelligent testing and simulation grew by 7%, achieving revenue of 191 million yuan, gross profit margin slightly increased to 20% (gross profit margin in 2018 was about 19%), and revenue of microsystems and control components grew by 20%. Achieve revenue of 217 million yuan, gross profit margin continues to grow to 38% Revenue from the automation equipment business of the nuclear industry grew by 75 per cent (mainly due to a sharp increase of 440 million yuan in related party transactions in October-December), with revenue of 186 million yuan and gross profit margin rebounding slightly to 29 per cent.
According to the existing orders, the follow-up company's microsystems and control department components and nuclear industry automation equipment business will continue to grow high, and the company is expected to grow at an average rate of no less than 40% in the next two years. It is estimated that the net profit of the company from 2019 to 2021 is 1.45,2.05 and 285 million yuan respectively, and the corresponding EPS is 0.20,0.28,0.40 yuan respectively according to the 720 million shares after the completion of the additional offering. The current stock price corresponds to the PE value of 45x, 32x and 23x respectively from 2019 to 2021. For the first time, coverage gives a "highly recommended" rating.
Risk Tip: the orders of Xuanyu and Xuanyu are not as expected.
