Event: the company released its mid-year report, with revenue of 703 million yuan, down 29.55% from the same period last year, and net profit of-24 million yuan, reducing losses by 49.46%.
Core viewpoints
Reduce the scale of non-independent products, focus on core business, and improve profitability. The 29.55% decline in revenue during the reporting period is mainly due to the reduction of the scale of non-independent products that lack core competitiveness in the radar industry and wisdom industry, so as to gather resources and focus on the main business. The loss reduction on the profit side is mainly due to the increase in gross profit margin of the main products 8.88pct (in which the gross profit margin of radar business increases 16.49pct), and the decline in sales expense rate 0.91pct (labor costs and after-sales service fees are lower than the same period last year). But at the same time, due to the decline in the scale of sales and the increase in amortization of intangible assets and depreciation of fixed assets over the same period last year, the company's management expense rate increased 4.48pct. On the whole, the operating efficiency of the company improved during the reporting period.
Increase investment in the construction of industrial parks and receive funds in advance. At the end of the reporting period, the company was under construction of 145 million yuan, an increase of 28.18% over the beginning and 51.44% over the same period last year, mainly due to continuous investment in the construction period of special industrial parks, laying the foundation for the company's sustained growth. The contract liability at the end of the period was 407 million yuan, an increase of 25.15% over the beginning of the period and 28.11% over the same period last year, mainly due to the increase in the amount received in advance in accordance with the agreement, indicating that the company's orders continued to improve. In the first half of the year, the company received 748 million yuan in sales, down 47.34% from the same period last year, and 780 million yuan in cash, down 31.61% from the same period last year, which may be related to the decrease in rebates for projects in low-altitude areas perceived by Bowei Changan and the reduction of the scale of non-autonomous products by the company.
New progress has been made in radar technology and products, and the smart industry continues to consolidate its position. Radar industry: in the first half of the year, the company made key technological breakthroughs in its new phased array weather radar based on digital array technology, won the bid for two civil aviation air traffic control radar overhaul projects and the second radar project of Flight Test and Research Institute, and successfully developed a highly integrated microwave digital composite substrate with fully independent intellectual property rights, and the microwave industry completed the design and production of FKB simulator and vehicle-mounted ZTO Express. Wisdom industry: Beidou emergency radio beacon beacon batch production and sales, Beidou emergency radio beacon beacon batch production and sales, winning the bid Guizhou provincial reserve grain depot and other intelligent upgrade projects, winning the bid for a certain cabin and vehicle modification system project.
Financial forecasts and investment suggestions
Taking into account the 19-year orders and shipments are not as expected, the adjusted company's earnings per share in 20-21 years are 0.88,1.04 yuan (original forecast 1.81,1.99 yuan), and the new 22-year EPS is 1.19 yuan. With reference to the comparable company's 20-year price-to-earnings ratio of 56 times earnings, the target price is 49.28 yuan and the "buy" rating is maintained.
Risk hint
The product order is not as expected; the progress of restructuring and professional integration is not as expected.