Event: the company released the 2023 China report. In the first half of 2023, revenue reached 361 million yuan, an increase of 100.64% over the same period last year, and a net profit of 30 million yuan, an increase of 277.55% over the same period last year. The performance exceeded market expectations.

Main points of investment

Revenue grew by more than 100% in the first half of 2023, and the overall performance was good: revenue in the first half of 2023 was 361 million yuan, an increase of 100.64% over the same period last year, and a net profit of 30 million yuan, an increase of 277.55% over the same period last year. The company's gross profit margin in the first half of 2023 was 27.97%, an increase of 9.70pct 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. Investment in R & D was 68 million yuan, an increase of 24.55% over the same period last year, accounting for 18.90% of operating income. The financial expenses were-12 million, a decrease of 111.12% over the same period last year, mainly due to an increase in the average monthly balance of bank deposits compared with the same period last year. The administrative fee was 26 million, an increase of 11.68% over last year.

The company issued public shares for the first time to further enhance the influence of the company's industry: on May 10, 2023, the company issued shares for the first time, raising a total of 1.785 billion yuan and raising a net fund of 1.657 billion yuan (about 747 million yuan). Used for production intelligent transformation projects (490 million yuan), R & D and test base construction projects (240 million yuan) and supplementary liquidity (190 million yuan). The company actively promotes the construction of intelligent production transformation projects and R & D test base projects, and further enhances the company's scientific research and production support capacity, R & D innovation ability and comprehensive competitiveness by speeding up the implementation of fund-raising projects. lay a solid foundation for the company's future business development.

The company has continuously increased R & D investment and strong independent R & D capability: since its establishment, the company has always adhered to scientific and technological innovation, has a strong independent R & D capability, and has continuously increased investment in scientific research and pre-research of cutting-edge technology. mastered a number of core technologies, such as phased array radar overall design technology, software radar technology, adaptive anti-jamming technology, target classification and recognition technology, high mobility and high integrated structure design technology. Accumulated a wealth of radar theoretical basis and engineering practical experience, successfully won the bid in the field of multi-type air defense early warning radar development project. During the reporting period, the company obtained 5 invention patents and accumulated 45 invention patents, including the method of radar adaptive resource scheduling and visual control, miniaturized distributed digital beamforming system and so on.

Profit forecast and investment rating: based on the company's core position in the field of air defense early warning radar, we maintain our previous forecast that the net return profit for 2023-2025 will be RMB 2.02 million, corresponding to a multiple of PE in 42-33-26, and maintain a "buy" rating.

Risk tips: 1) technology upgrade replacement risk; 2) product price reduction risk; 3) military trade business lower than expected risk.