The company released a semi-annual report for 2023, with operating income of 361 million yuan, an increase of 100.64% over the same period last year, a net profit of 30 million yuan, an increase of 277.55% over the same period last year, and a deduction of 22 million yuan for non-net profit, an increase of 218.73% over the same period last year.

The performance of the scarce active phased array radar platform H1 has improved significantly in the past 23 years. The company realized operating income of 361 million yuan, an increase of 100.64% over the same period last year, mainly due to an increase in the delivery of domestic and foreign products over the same period last year. The company's total profit was 24 million yuan, compared with-27 million yuan in the same period last year. According to the business situation, the company's radar and supporting equipment products realized revenue (309 million, + 104.59%); radar parts business realized revenue (52 million, 95.75%).

The rate of expenses for the three items dropped sharply, and the net interest rate turned from loss to profit. In terms of profitability, the company's gross profit margin during the period was 27.97%, an increase of 2.47pct over the same period last year. During the period, the company incurred sales expenses (4 million, + 2.06%); management expenses (26 million, + 11.68%); and financial expenses (- 12 million, compared with-6 million in the same period last year), mainly due to the increase in the average monthly balance of the company's bank deposits compared with the same period last year. R & D cost (68 million, + 24.55%). The company's three-item expense rate is 5.03%, which is lower than that of the same period last year (6.93pct).

The net profit margin on sales was 8.17%, an increase of 17.4pct over last year.

Focus on the main business of air defense early warning radar, and constantly expand the arms trade and other application markets. The company focuses on the main business of air defense early warning radar, while strengthening the development of the domestic market of radar aircraft, and actively promoting the expansion of military trade market business. The company's military trade business income reached 110 million yuan in the first half of 2023. On the other hand, actively respond to the needs of users, increase the research and development and production of radar protection equipment, radar testing equipment and other supporting equipment products, a certain type of training and evaluation system has successfully expanded the new user market, won the bid for a user ATC radar supporting equipment development project, and entered the field of air traffic control.

Technical advantages cast a solid moat, stable orders to ensure the sustainability of performance. As a listed company of Beijing Radio Institute, the technical strength of air defense early warning radar is in the leading position in the world, and it undertakes the task of early warning detection, surveillance and control of air targets. it is a kind of important electronic equipment in modern warfare. it has an extremely important strategic position in the field of national defense. In recent years, the company has participated in the bidding of scientific research projects in 25 countries, the military and other channels, and won 16 projects. After the completion of some projects, it is expected to obtain continuous orders in a certain period of time in the future, and the company's domestic performance may maintain steady growth.

Profit forecast: the company is expected to have a net profit of 1.87,2.32 and 289 million yuan in 2025, corresponding to a valuation of 44, 36 and 29 times, and upgraded to "highly recommended".

Risk tips: military customers to make up for price differences changes, military trade development is not timely, new products into mass production is not as expected.