Event: on August 18, 2023, the company released its 2023 semi-annual results report. In the first half of 2023, the company achieved revenue of 250 million yuan, an increase of 1.51% over the same period last year, a net profit of 39 million yuan, an increase of 12.90%, and a non-net profit of 32 million yuan, an increase of 3.90% over the same period last year.
Main points of investment
With the double growth of revenue and profit, the company has plenty of business on hand. In the first half of 2023, the company's revenue was 250 million yuan, up 1.51% from the same period last year, and the net profit was 39 million yuan, up 12.90% from the same period last year. The gross profit margin was 44.69% (year-on-year-0.50pct), and the net profit rate was 15.45% (year-on-year + 1.56pct).
Of this total, the Q2 quarter revenue was 127 million yuan, down 35.60% from the same period last year, and the net profit was 17 million yuan, down 58.84% from the same period last year. The non-net profit was 13 million yuan, down 67.10%. The inventory of the company at the end of 2023H1 was 564 million yuan, down 1.92%. By the end of the period, the company had abundant orders on hand, and the volume of business increased greatly compared with the same period last year. The order on hand exceeded 700 million yuan, including 560.67 million yuan for unmanned systems; 88.62 million yuan for satellite communications; and 69.82 million yuan for information awareness at the end of the period.
The development of the drone business is brilliant and it has won a large order. Xingwang Yuda is one of the first enterprises in China to develop unmanned systems, with products covering different types of drones, unmanned vehicles, unmanned ships, etc., in which special attention is paid to the new UAV business and continues to increase related technology research and development to consolidate core competitiveness. UAV business is expected to become the company's future performance pillar. In June 2023, the company announced that it had won the bid to sign a major supply contract, with a total contract amount of 317.898 million yuan, accounting for 29.59% of the company's total revenue in 2022, including 266.01 million yuan for a certain type of UAV, 38.258 million yuan for a certain type of training product, and 1363.00 yuan for a certain type of Weitong product, which is expected to have a positive impact on the company's operating income and profits.
Downstream demand is strong, the main business demand is expected to increase steadily. According to Marketsandmarkets, China's military UAV market is expected to be about $9.866 billion by 2025, with a compound growth rate of about 29.7% from 2018 to 2025. The company's UAV products are mainly unmanned target aircraft. with the promotion and deepening of the actual combat and normalization of military training, the market space of unmanned target aircraft will be further expanded.
The growth rate of China's satellite communications industry is expected to further accelerate, among which the "Mobile ZTO Express" system has a high potential demand in both the military and civilian fields.
Profit forecast and investment rating: based on the company's leading position in the field of unmanned target aircraft, we maintain our previous forecast for the company, with a projected net profit of 330x49x544 million in 2023-2025, corresponding to a multiple of PE in 19-14-12, and maintaining a "buy" rating.
Risk tips: 1) downstream demand and order fluctuations; 2) corporate earnings are lower than expected; 3) market systemic risk.