Event description

On October 24, the company released its third quarter report for 2023. According to the announcement, in the first three quarters of 2023, the company realized revenue of RMB 506 million yuan, with a year-on-year growth of 114.06%; net profit attributable to parent company was RMB 41 million yuan, with a year-on-year growth of 204.25%.

The military trade business has sufficient orders in hand

According to the "Investor Relations Activity Record Form" issued by the Company on October 23,2023, it is disclosed that the Company also has a lot of layout in the military trade market, and the Company has a number of military trade product models on sale. In the current complex and changeable international environment, many countries urgently need to build air defense forces, and the demand for air defense early warning radar is more urgent. At the same time, with the steady improvement of China's international status, the rapid development of defense industry and the continuous improvement of air defense early warning radar equipment performance, China's air defense early warning radar international market competitiveness has increased year by year, and the military trade export of radar equipment has ushered in good development opportunities.

Diversified development pattern is expected to cultivate new revenue growth points in the future According to the "Investor Relations Activity Record Form" issued by the Company on October 16, 2023, in the long run, the Company's revenue is expected to have relatively large growth space, and the main growth sources include the following aspects: (1) the old model products continue to contribute revenue, and at the same time, the Company's main in-service model products have long-term maintenance equipment and spare parts needs;(2) The revenue growth brought by new models of products after finalization and approval in the future;(3) The military trade business is gradually developing, and the company has a number of military trade models in production, and the military trade business will also become an important source of revenue growth for the company in the future;(4) The company is also actively deploying new business fields such as air traffic control radar, which will also become the revenue growth point of the company with the gradual landing of relevant products in the future.

Investment suggestion

It is estimated that the net profit attributable to the parent company in 2023/2024/2025 will be CNY 1.96/244/307 million respectively, and the corresponding growth rate will be 24.7%/25.0%/25.7%. The corresponding PE were 40.26, 32.22 and 25.64 times respectively. Maintain a "Buy" rating.

Risk hint

The release of production capacity of fund-raising projects is slow, and downstream demand is lower than expected.