Incident: Starnet Yuda released its 2022 annual report. The company's revenue in 2022 was 1,074 million yuan, an increase of 39.88% over the previous year; Guimu's net profit was 215 million yuan, an increase of 33.77% over the previous year.
Comment: The company's 2022 performance is in line with expectations. Unmanned systems and information sensing businesses have both achieved significant growth, and satellite communication services have declined slightly. 1) Revenue from unmanned systems increased 56.99% year-on-year to 724 million yuan. Affected by rising raw material prices and labor costs, gross margin fell slightly by 3.51 pct to 43.74%. 2) Information perception revenue increased 33.73% year over year to 190 million yuan, while gross margin increased slightly by 1.12pct to 49.19%. 3) Satellite communications revenue fell slightly by 2.67% year on year to 150 million yuan, while gross margin fell slightly by 0.43 pct to 43.98%. 4) As early R&D projects entered the verification stage, the company's R&D material costs were reduced. In 2022, R&D expenses were invested 97 million yuan, a decrease of 14.34% over the previous year.
Demand for unmanned systems is strong, and the company has R&D and production capacity from core components to complete machines, which is expected to continue to drive performance growth in the future. The company is deeply involved in the field of military testing and training, has formed the most complete unmanned target aircraft product lineage, and has good technology accumulation in the fields of overall drones, drone flight control, and drone formations. Benefiting from the increase in consumables for military close combat exercises, the unmanned target aircraft market is certain to grow and has broad prospects. The continuous expansion of unmanned vehicles and unmanned ship products has brought about medium- to long-term growth momentum. It is expected that the company will continue to promote the deep integration of information sensing, satellite communication and unmanned systems in the future. We are optimistic that unmanned systems will continue to drive the company's future performance growth.
The information perception business is growing steadily: application fields continue to expand, collaborating with the development of internal unmanned systems. 1) The company has many core technologies with independent property rights in the field of inertial guidance, has pioneered new application fields such as unmanned driving, track inspection, and unmanned systems, and continues to cooperate with Baidu, Meituan, etc. in the field of civilian autonomous driving. 2) Optoelectronic gondola tracking turbines have been applied to frigates in batches, and laser-type photoelectric turret equipment has also entered the finalization stage. 3) Security phased array radar has the characteristics of miniaturization, all-solid-state, low cost, etc., and has been used in security and anti-drone fields.
The core of satellite communication services is stable, and integrated R&D and design capabilities for low-orbit satellites and systems have improved markedly. The company's “Dongzhongtong” antenna has strong core competitiveness, and its products have been selected for various military types of equipment. In addition, the company completed more than ten system integration assurance projects in 2022 and participated in the validation of next-generation satellite network construction plans, leading the industry in many design indicators.
Profit forecasting, valuation and ratings: Demand for military combat training continues to grow, the company is deeply involved in the field of trial training, demand for unmanned target aircraft is strong, and future performance is expected to benefit and grow steadily. We forecast the company's revenue for 2023-2025 to be 14.34/18.40/2,239 billion yuan respectively, up 33.46%/28.30%/21.71% year-on-year. Considering the continued strengthening of the company's customers' air defense and anti-missile training demand, we slightly adjusted Fumo's net profit for 23-24 to 297/418 million yuan (+4.58%/11.47% from the previous forecast), adding 507 million yuan to the 25-year forecast. 21.25%; the current stock price corresponds to PE 22/16/13 times respectively, and we maintain the “buy” rating.
Risk warning: Market competition intensifies, downstream demand falls short of expectations, and R&D falls short of expectations.