Event: the company released 2019 results KuaiBao, realized operating income (945 million yuan, + 26.78%); return to the mother net profit (141 million yuan, + 44.58%).
The performance growth is in line with expectations, and the military electronic income has doubled.
Revenue and profits have improved significantly compared with 2018, and the share of military electronics has increased. Among them, the military business benefited from the growth in demand for domestic independent controllable products, and the effect of the company's early investment in research and development began to show. Military electronics doubled its income of 94 million yuan in 2018, and it is expected that the gross profit margin will decline due to intensified competition in the industry, and profit growth may be slower than income growth.
The refrigerator industry turned to frequency conversion, and the company's frequency conversion controller achieved large-scale mass production in 2019, driving the refrigerator compressor parts business to continue to grow steadily. According to the doubling of military electronic income, refrigerator compressor supporting product revenue is expected to increase by 16%. Among them, 19Q4 realized revenue (309 million yuan, + 82.84%) and returned to its mother with a net profit of 34 million yuan, compared with 18Q4.
The core benefit target of global Leo satellite constellation construction
Relying on the core technology of Tsinghua University, the company is the first space optical sensor company in China to operate commercially, and its products have been applied in Hongyan constellation and Galaxy Aerospace first star, among which 400000 of the company's single product is used in Hongyan constellation, and the company's 2 products are also used on the first 5G satellite launched by Galaxy Aerospace in January. At present, of the 9 satellite manufacturing enterprises involved in the construction of Leo satellite constellations, 7 have used their products. And due to the international leading product performance, obvious cost-effective advantages and in-orbit satellite data support, the company's products have been applied to the United States MITRE atmospheric exploration satellite, European Alpha global multimedia satellite, and have participated in the ladder quotation of American One-Web, which does not rule out the possibility of entering the supplier system of international mainstream satellite manufacturing enterprises in the future. According to our estimates, if 2-3 star sensors are used on a single satellite, assuming that the company's market share at home and abroad is 80% and 20% respectively, the potential market space is 1.6 billion yuan and 3.5 billion yuan respectively.
Keep an eye on the expansion of Huaqing Rida millimeter wave radar test in the intelligent driving market according to investor relations records, this is the best period for Huaqing Rida to develop. Its traditional business includes radar and electronic warfare simulation testing, avionics module and high-speed signal processing platform, in which radar and electronic warfare simulation and testing business occupies the forefront of the domestic market share. Broadband RF SIP chips have been applied to related electronic warfare projects in the military's 13th five-year Plan, and avionics modules have been matched for the new generation of general tactical helicopters in China. Considering the information construction and the demand of independent control, it is expected that the military electronic business will maintain rapid growth.
Huaqing Ruida has expanded to the precision electronic system test and measurement business in the field of civil intelligent driving, and has begun to cooperate with Huawei, DJI and other well-known enterprises. According to investor relations records, at present, the company is the first domestic tender for millimeter wave testing equipment of a certain manufacturer and signed a contract; a drone, a security, a new energy vehicle manufacturer, etc., are also in contact with the company; the millimeter wave radar identification equipment of a certain automobile research institute is also a company product, and the future millimeter wave radar on the road needs to be licensed by the vehicle inspection office. The company's products have obvious cost-effective advantage, which is only half of the price of international manufacturers, not only on the production line, but also in 4S stores. At present, Keysight in the United States and Rudeswarts in Germany are also developing this market, and according to investor relations records, the domestic market capacity is estimated to be 500-1 billion yuan per year.
Investment suggestion: relying on Tianyin Interstellar, the star photosensitive sensor technology is the international leader, which is not only the core benefit target of domestic Leo satellite constellation construction, but also participates in the global market.
In addition, the company has realized the depth of the military electronics industry chain around Huaqing Ruida's successive acquisition of information analysis technology, and it is expected that with the construction of national defense information, the continuous stereotyping and release of new products, and the expansion of the millimeter wave radar testing market for civilian products, the military and the people may keep growing at a high speed. We expect the company's net profit from 2019 to 2021 to be 1.41,1.83 and 265 million yuan respectively, with a corresponding valuation of 60,46 and 32 times, maintaining a "buy-B" rating.
Risk hint: Leo satellite constellation construction is not as fast as expected; business orders for military electronic components are slow.
