Event

Recently, the company released a third-quarter report that its operating income in the first three quarters was 2.165 billion yuan, an increase of 11.69 percent over the same period last year, and its net profit was 358 million yuan, an increase of 20.28 percent over the same period last year.

Brief comment

Recently, the company released a third-quarter report that its operating income in the first three quarters was 2.165 billion yuan, an increase of 11.69 percent over the same period last year, and its net profit was 358 million yuan, an increase of 20.28 percent over the same period last year. In the third quarter alone, the operating income was 503 million yuan, down 38.23% from the same period last year, and the net profit belonging to listed companies was 122 million yuan, an increase of 66.59% over the same period last year. Due to the impact of the epidemic in the third quarter of the harvest, delivery decreased year-on-year, and delivery was postponed to the fourth quarter. The year-on-year increase in net profit was mainly affected by the product structure, with a gross profit margin of 33% in the third quarter, an increase of 7.43 percentage points over the second quarter. In addition, the increase in interest income also increases the company's net profit margin. From the inventory point of view, the inventory at the end of the third quarter was 1.462 billion yuan, an increase of 37.66% over the end of the second quarter. The contract liability was 388 million yuan, an increase of 31.97% over the end of the second quarter, and the performance is expected to improve after the impact of the epidemic is gradually eliminated in the fourth quarter.

Research and development costs continue to rise, and the newly developed models lay the foundation for subsequent growth. The company's R & D expenditure in the first three quarters was 129 million yuan, an increase of 168% over the same period last year. According to the company's report, at present, during the scientific research and flight test of the pterodactyl-1E UAV system, it will be used in military reconnaissance, surveillance, strike, civil emergency communications and so on. Pterodactyl-2 develops Ⅰ (pterodactyl-2D) and pterodactyl-2 develops Ⅱ (pterodactyl-3). Pterodactyl-2D can be used for multi-scene and multi-task requirements in military and civil fields. Pterodactyl-3 is also widely used in the market as a large platform for multi-purpose UAV.

The new research model lays the technology for the follow-up company's performance growth.

The demand for unmanned aviation equipment downstream of the company continues to grow. According to a report issued by the Tyre Group, the main output value of the global military UAV is concentrated in the fields of unmanned aerial vehicle system, mid-altitude long-flight UAV system and high-altitude long-flight UAV system. The total output value of medium-altitude long-flight UAV system and high-altitude long-flight UAV system is 44.38 billion US dollars, accounting for 49% of the total market in the same period. As an important carrier platform for detection and attack in recent years, UAV is in line with the development direction of unmanned, electronic and information-based warfare in the future, and has a broad space for market development. China's military UAV market is expected to maintain a double-digit growth rate by 2025.

Profit forecast: UAV foreign trade leading company, the military and civilian market application space is broad, we believe that the company as the drone foreign trade leader, "pterodactyl" brand has a high market reputation. The company's products are based on the market strategy of "type I equipment serving both domestic and foreign markets". In the future, we will achieve the pedigree and serialization development of "pterodactyl" drones and maintain the leading technical level in China.

It is estimated that the company's homing net profit from 2022 to 2024 is 4.17,5.80 and 693 million yuan respectively, with year-on-year growth of 40.92%, 39.07% and 19.60% respectively. The PE of the current stock price from 2022 to 2024 is 84.06,60.44 and 50.54 respectively.

Risk analysis.

The risk of iterative technology upgrade: the company's large fixed-wing long flight hour UAV industry is a technology-intensive industry. The R & D, design and manufacture of UAV cover key technologies such as flight control and avionics technology, UAV design and manufacturing technology and integrated design and integration technology, which have high requirements for the ability and investment of technological innovation. Product performance and product innovation depend to a large extent on the technical level and continuous R & D investment of the enterprise. Although the core technology mastered by the company is a leader, if the company cannot accurately predict the market development trend of products, research and develop new technologies in time, continuously upgrade product performance and update product structure, or scientific research and industrialization can not be followed up at the same time, the company's technology and products will gradually lose market competitiveness and affect the company's profitability.

The risk of the company's R & D failure or failure to achieve industrialization: the company's main business is the research and development, production and sales of large fixed-wing long flight-hour UAV systems. The development and finalization of large fixed-wing long flight-hour UAV system needs to go through early technical demonstration and continuous research and development practice in the later stage, and the period from R & D to industrialization is long. At the same time, the R & D process of the company's new products and technology optimization is more complex, time-consuming and high R & D investment, there is a certain degree of uncertainty. Due to the characteristics of long cycle, large investment and high risk in the research and development of corresponding products and technologies, if the company fails to keep up with the frontier demand of the industry and leads to the failure of R & D, or the high amount of R & D investment cannot be transformed into technological achievements, or the transformation effect of the company's technological achievements does not meet expectations, it may lead to a decline in the competitiveness of the company and adversely affect the profitability of the company.

Business is affected by political factors: military trade plays a unique role in adjusting multilateral relations, improving strategic posture, balancing strategic forces, etc., and is a direct reflection of political and political relations between countries. Military trade can have a significant impact on the multilateral diplomatic relations and foreign policies of both parties and even related to it. With the development of global military trade towards institutionalization, order, transparency and harmlessness, the turnover and delivery of arms exports in the world arms trade market are on the rise as a whole, and arms exports are mainly concentrated in the Asia-Pacific and the Middle East. In terms of political factors, China's military trade has certain advantages in some countries, and if there are adverse changes in the international political pattern, it may adversely affect the company's business performance to a certain extent. At present, the production and operation of the issuer is in good condition. as a response, it has established a long-term and stable cooperative relationship with major cooperative military trade companies, and is actively expanding its business in the civilian field.

Market competition aggravates risks. In view of the fact that UAV has the remarkable characteristics of zero casualties, superior combat performance and low cost, after the training of several local wars, UAV system has become one of the key points of weapons and equipment development in the United States, Israel, France, Britain and other western countries, and it is also the key direction of weapons and equipment development in China in the future. At the same time, with the continuous maturity of mission payload technology of UAV system, a wide range of scene applications and broad market space have emerged in the field of industrial UAV, and the civil market competition of UAV system is becoming more and more fierce. The company's products are mainly military UAV systems, civilian products business has developed artificial weather, emergency industry and other fields. Although the downstream market of UAV system has a broad prospect, if the company can not implement an effective market competition strategy in the future, it may miss the market development opportunity and adversely affect the future business development of the company.