Event: on August 22, the company released its semi-annual report of 2022, with operating income of 182 million yuan, an increase of 6.88% over the same period last year, and net profit of 23 million yuan, an increase of 7.23% over the same period last year.
Revenue and profits increased significantly in the second quarter, and the expense rate decreased significantly during the period. 2022Q2 achieved a revenue of 165 million yuan, an increase of 53.60% over the same period last year, and a net profit of 44 million yuan, an increase of 209.48% over the same period last year. 2022H1's overall gross profit margin is 57.23%, a year-on-year decline of 7.75pct, which may be related to changes in the company's product structure and tax policy. The expense rate of 2022H1 during the period was 44.96%, which was lower than that of the same period last year (24.06pct). Among them, the rate of sales expenses was 9.07%, a decrease of 4.69pct compared with the same period last year, mainly due to the reduction of wages and salaries of sales staff caused by changes in the organizational structure of the company; the rate of management expenses was 11.85%, a decrease of 4.72pct compared with the same period last year, due to the reduction of share payment for equity incentive provided by the company; and the rate of R & D expenses was 30.57%, a decrease of 12.91pct compared with the same period last year. The financial expense rate-6.54%, a decrease of 1.73pct compared with the same period last year, is mainly related to the increase in deposit interest income during the reporting period.
There is an urgent need to improve the information level of our army, and the company as a core supplier of military broadband is expected to fully benefit. At present, the main combat equipment of our country is still narrowband communication, which has a big gap with the information level of foreign armies. The 14th five-year Plan is the critical period of national defense information construction, and the related information equipment has entered a clear deployment and implementation period. The company has layout in communication chip, communication module, terminal, base station and application system, forming a complete military broadband communication industry chain. The downstream of the company covers the army, rocket army, navy, air force, armed police and strategic support forces, is the core supplier of military broadband communication equipment, will fully benefit from the military broadband information construction.
The technical level is advanced in the world, and a large number of research and development models will thicken the company's performance in the future. The company undertakes the task of developing communication equipment of many arms, and its R & D and production can be controlled independently. It ranks first in the evaluation of military broadband mobile communication projects many times, and its products have reached the same level as the most advanced broadband mobile communication equipment in foreign armed forces. In the first half of this year, the company's research projects include wide and narrow band compatible wireless communication systems based on SDR platform, wireless broadband communication products based on equipment platform, new generation access waveforms and ad hoc network waveforms, 5G products based on military requirements, new generation bone network microwave network radio products, small low power ad hoc network terminal modules and small terminal communication products, airspace anti-jamming technology launch products, etc. The company is studying a large number of projects, and will gradually set up mass production in the future, which is expected to thicken the company's performance.
Investment suggestion: military communication equipment is crossing the domain from narrowband (2G) to broadband (4G). The 14th five-year Plan period is the key period of national defense information construction, and the military broadband mobile communication industry is expected to usher in explosive growth. The company is the core supplier of military broadband communication equipment, the technical level is advanced in the world, the products cover the whole arms, and is expected to fully benefit from the construction of military broadband communications. It is estimated that the net profit of the company from 2022 to 2024 is 318 million yuan, 408 million yuan and 533 million yuan respectively, and the corresponding PE is 29.4,22.9,17.5 respectively. Coverage for the first time, giving a "overweight" rating.
Risk hint: COVID-19 epidemic led to lower-than-expected product delivery and lower-than-expected R & D results.
