Incidents: The company released its 2020 semi-annual report, which achieved operating income of 208 million yuan, a year-on-year increase of 58.18%; net profit of 30.647,500 yuan, a year-on-year increase of 1689.80%; net profit after deduction of 238.37,900 yuan, loss of 775,600 yuan for the same period last year; and basic earnings per share of 0.20 yuan. The company expects net profit for the first three quarters to be 65-78 million yuan, up 1,127.71% to 1,373.25% year on year. Key investment points: The rapid growth of unmanned systems is the main reason for the sharp increase in revenue and profit in the current period. Among the company's three major businesses during the period, unmanned systems achieved revenue of 124 million yuan, a year-on-year increase of 107.49%, a year-on-year increase of 14.21pct to 59.84%, a gross profit margin of 50.79%, a year-on-year increase of 3.16pct; satellite communications revenue of 41 million yuan, a year-on-year increase of 32.72%, a gross profit margin of 53.72%, a year-on-year decrease of 53.72%, a year-on-year decrease of 2.63pct; and information sensing revenue of 33.4 million yuan, a year-on-year decrease of 6.58%, a year-on-year decrease of 54.94%, a year-on-year decrease of 0.59pct. Ongoing orders are plentiful, Q2 growth is accelerating, and the company's performance is expected to continue to grow at a high rate. According to company announcement statistics, the total amount of new orders signed by the company during the year reached 362 million yuan, and the cumulative number of on-hand orders was about 442 million yuan, exceeding the revenue scale of 399 million yuan for the full year of last year. Among them, orders for drones in hand reached 305 million yuan, and orders for certain types of satellite communication terminals reached about 110 million yuan. During the reporting period, contracts were carried out normally as agreed, and delivery and acceptance of some products have been completed. In Q2, the company's revenue increased 112.17% year on year, and net profit was increased by 967.97% year on year, showing an accelerated growth trend compared to Q1. Currently, orders for intelligent unmanned systems are full, and market demand is strong. It has already entered a harvest period. As businesses such as unmanned systems and satellite communications continue to make new breakthroughs, the company's performance is expected to continue to grow at a high rate. Intelligent unmanned systems are the company's main strategic direction, and are expected to continue to benefit from the increase in the intensity and frequency of practical military training and the broad market brought about by the trend of unmanned equipment. 1) Unmanned target aircraft bear the responsibility of the “Blue Army in the Air”. They are mainly used to simulate enemy air attack targets. They are the core means of military air defense training, and are in wide demand in military classes and war zones, such as sea, land, and air. The company's unmanned target aircraft products have now formed a total of five product systems covering three types of low speed, medium speed, and high speed. The core avionics supporting products such as navigation, communication, and control are all independently developed, and are highly intelligent and localized, and have strong market competitiveness. As the frequency and intensity of practical training continues to increase, the drone business is expected to continue to grow at a high rate. 2) The company continues to invest in the field of unmanned vehicles and has leading technical advantages and industrialization capabilities. The US and Russia have equipped tens of thousands of unmanned military vehicles of various types. Referring to the US and Russia, domestic demand is also expected to reach tens of thousands of units. The market capacity is at the level of 10 billion yuan. The company's business is progressing smoothly, and it has already received orders of 10 million yuan. Intelligence and unmanned operation are future war trends. The proportion of intelligent unmanned equipment deployed in the Chinese military is expected to continue to increase, and the company will benefit in the long term. The satellite communication business has achieved good results in both military and civilian applications, and new breakthroughs have been made continuously in the information sensing business. 1) The company is a leader in dynamic communications and will benefit from the transformation of military satellites and the booming development of satellite Internet. In terms of military use, the number of orders for land-based dual-frequency movable antennas continues to grow, and shipborne dual-frequency antennas have been completed and batch delivery has begun; for civilian use, orders have also been received, and they have expanded to low-orbit satellite communication systems. 2) The information sensing business includes inertial guidance and photoelectric detection. In terms of inertial guidance, the company has achieved a full industry chain layout from core devices to solutions, and has formed a significant leading edge in the field of autonomous driving, and is actively expanding into the military field; in terms of photoelectric detection, the company has completed a series of product development and achieved breakthroughs in the fields of drones, customs, coastal defense, surveillance, etc. Profit forecast and investment rating: Maintaining a buying rating. Net profit for 2020-2022 is estimated at 146 million yuan, 195 million yuan and 239 million yuan respectively, corresponding to EPS of $0.96, $1.28 and $1.56, respectively, and corresponding to current stock price PE of 47 times, 35 times and 29 times, respectively, maintaining the buying rating. Risk warning: 1) Unmanned systems development falls short of expectations; 2) satellite Internet construction falls short of expectations; 3) military bidding and procurement progress falls short of expectations; 4) systemic risks.