What happened: the subsidiary Maitexin recently received a "bid winning notice", winning a bid for a communications equipment of 140.98 million yuan, accounting for 38% of revenue in 2022.
Large orders help ship communications, basically stable and improving. The company's ship communication products can provide information transmission channels and communication business applications for super-large, large, small and medium-sized ships, which is the basis of the company's business. The winning bid reflects the company's competitiveness in the field of warship communications. In the next two years, with the gradual confirmation of revenue from orders, the business will develop steadily and steadily. In addition, as of Q1, the company still has about 214 million yuan in-hand orders and production preparation notices, superimposing new orders for warship communications and other business. it is expected that the company's current orders-on-hand are sufficient, and annual performance growth is expected.
The network security service is ready to go, and it is expected to achieve from 1 to 10. We believe that the development of equipment in the first half of the 14th five-year Plan tends to the improvement of "hard equipment / hard power", while the second half of the "14th five-year Plan" and the "15th five-year Plan" are more inclined to the progress of "soft equipment / soft power". As part of soft power, military network security will usher in a period of development opportunities, with a compound growth rate of 25% to 30% in the next three years. The company has been involved in this field for a long time and is the scientific research undertaker and product provider of major products in this field. As the newly stereotyped products enter the mass production period, the business revenue may reach 64% CAGR in the next three years, leapfrogging from 1 to 10.
Power network from 0-1, will become the company's new growth pole. Commissioned by Xi'an Thermal Engineering Research Institute, a subsidiary of Huaneng Group, the company develops the national chemical DCS fire control system and the domestic gas turbine control system core card DEMO board, which marks the company's official entry into the domestic self-controllable field of the power industry.
We estimate that Huaneng Group alone has billions of domestic market space for related systems.
The business has been piloted for 23 years and will gradually contribute revenue, and it is expected that after two years of iteration, technology and products will stabilize and quickly enter the volume period. In the future, the power business sector is expected to become a new growth pole of the company, realizing the double-round development of the military and the people.
Equity incentives have been granted, performance assessment compound growth rate of 35.7%, demonstrating confidence in development. For the first time, the company granted 55 people 2.926 million stock options at an exercise price of 24.87 yuan per share, which is lower than the share price on the date of the draft announcement. The operating evaluation indicators of the plan are as follows: with 2022 as the base, the target growth rate of net profit from 2023 to 2025 is 30%, 80%, 150%, corresponding to net profit of 53 million / 74 million / 103 million yuan, and the compound growth rate of three years is 35.7%. The total cost of equity incentive in the next four years is only 10.3628 million yuan, which has a very limited impact on performance.
Investment suggestion: the revenue recognition of the company's communications business products is mainly concentrated in the second half of the year, and the seasonality is very obvious. It is estimated that the home net profit of the company from 2023 to 2025 is RMB 1800.242 million respectively, with a compound growth rate of 81% for 3 years. The company's compound growth rate is 81%. The company's return to the home net profit from 2023 to 2025 is 1.79 yuan for 1.18company.EPS is 1.59 yuan for 39x/23x/18x. The company's production capacity will be worry-free in the next 5 years, and the prospect on the demand side is clear. At present, the market capitalization is only 4.2 billion, the flexibility is huge, the target market value is 7 billion, and the "recommended" rating is maintained.
Risk hint: the risk that the landing amount of the order is lower than expected; the risk of a sharp decline in gross profit margin.