Summary of the report:
1. The core competitiveness of the company lies in taking the infrared bottom technology as the cornerstone, forming the overall layout of the whole industry chain from chips and detectors to the integrated optoelectronic system, and then to the top complete equipment system, and the key links of the card industry chain. the barrier is significant and the competitive advantage is prominent. The company has been ploughing the infrared racetrack for more than 20 years, and its business covers four parts: infrared focal plane detector chip, infrared thermal imaging machine and integrated optoelectronic system, new complete weapon system, traditional non-lethal ammunition and information-based ammunition. Adhering to the concept of innovation-driven development, the company makes full use of the flexible mechanism of private enterprises to build the layout of scientific research and production of the whole industry chain, and the layout of private military groups gradually appears, forming a higher moat.
2. The underlying core technology can be controlled independently. At present, the company is the only private enterprise with R & D and batch production capacity of both refrigerated and uncooled infrared detectors, and has the only batch production line of Ⅱ superlattice refrigeration infrared core devices in China. Self-made infrared detectors are widely used in many domestic weapon systems. In 2021, the company developed the first medium wave two-color focal plane detector based on antimonide II superlattice with 1280 × 1024 and 15 μ m pixel spacing, reaching the international advanced level.
3. Under the tide of military informatization and modernization, the demand for military products remains high, and the company is the only private enterprise in our country that has the overall qualification of weapon system, which has a very high scarcity for private enterprises. the batch production and release volume of weapon systems is expected to continue to increase the company's performance. The company's infrared products are widely used in individual combat, armored vehicles, photoelectric pods, missile seeker and other fields, military demand to maintain a high boom. In December 2021, the company won the first batch purchase order for complete equipment systems and model matching products in China, indicating that the project has officially entered the stage of batch procurement of domestic model products, which will contribute new revenue and profit growth to the company in the near future.
4. The decline in cost promotes more blossoms in the field of civilian products, and intelligent cars give birth to considerable room for development.
In the field of civil products, with the continuous progress of technology, the cost of infrared products continues to reduce, which has been widely used in security monitoring, auxiliary driving, industrial monitoring, electric power detection, medical and other fields. The unit price of vehicle infrared detection equipment has gradually dropped to 1000 yuan, which has a good performance-to-price ratio for vehicle application.
The company cooperates closely with Dongfeng, Guangzhou Automobile and other car companies, and the follow-up is expected to increase gradually with the mass production of models.
5. Profit forecast and investment advice: we estimate that the company's operating income from 2022 to 2024 will be RMB 2870, RMB 4374max, respectively, and its net profit will be RMB 1.592 billion, corresponding to an EPS of RMB 0.25pm, and a "Buy" rating for PE48.20/30.01/25.36X.
Risk hint: military purchase orders fall short of expectations; civilian product expansion falls short of expectations