Event: The company released its three-quarter report for 2023. In the first three quarters of 2023, the company achieved revenue of 114 million yuan, a year-on-year increase of 19.33%, net profit of 33 million yuan, a year-on-year decrease of 7.81%; 2023Q3 achieved revenue of 41 million yuan, a year-on-year decrease of 13.75%, and net profit of 104 million yuan, a year-on-year decrease of 22.01%.
Key points of investment
Cyclical delivery led to a slowdown in revenue growth, and capital raised to provide interest income: In the first three quarters of 2023, the company achieved revenue of 114 million yuan, an increase of 19.33% over the previous year, of which Q3 achieved revenue of 41 million yuan, a decrease of 13.75% over the previous year. The company's customers mainly target the government and institutions. Affected by budget management and other factors, revenue confirmation is clearly seasonal, mainly concentrated in the second half or fourth quarter. In the first three quarters of 2023, the company achieved net profit of 30 million yuan, of which net profit was deducted from the mother's mother, of which 14 million yuan was realized in Q3. The interest income earned increased due to the increase in monetary capital brought about by the IPO. In the first three quarters of 2023, the company's interest income was 29 million yuan, up 857.40% year on year; gross profit margin was 76.33%, down 3.66 pct from the same period last year, and the operating situation was stable.
The IPO helped the company to further develop fully polarized active phased array radar technology: 2023/03/01 The company completed the IPO and was listed on the Science and Technology Innovation Board, and issued 38.668 million shares to the public, accounting for 25.00% of the company's total share capital after issuance, 46.68 yuan/share, issued price-earnings ratio of 86.77 times, and raised net capital of 1,654 billion dollars. The capital was used to build a fully polarized active phased array radar R&D innovation center and industrialization projects. This listing provides a strong financial guarantee for the company to expand production scale and develop new technologies and products, which helps to increase the company's popularity and promote the company's development.
Focus on independent innovation in fully polarized active phased array radar technology and broaden application scenarios: The company is an enterprise in China that has mastered the key core technology of fully polarized active phased array radar and achieved industrialization earlier. Its self-developed X-band bipolar active phased array radar detects, monitors, and warns small to medium scale, rapid formation, rapid generation and death, and strong disastrous strong convective weather. It has been certified as “international advanced level” by the China Radar Industry Association. In the future, products with better performance will be developed on the hardware side, and more application scenarios will be developed on the software side for water conservancy and flood prevention, civil aviation, forest fire prevention, etc.
Profit forecast and investment rating: The company's performance is in line with expectations. The company is an enterprise that has mastered fully polarized active phased array radar technology and industrialized X-band bipolar (dual polarization) active phased array radar earlier. Taking into account downstream progress, we adjusted our previous forecast and estimated net profit from 2023-2025 to 1.70 (-0.41) /2.68 (-0.57) /340 (-0.79) billion yuan. The corresponding PE was 44/28/22 times, maintaining the “increase” rating.
Risk warning: 1) R&D investment falls short of expectations; 2) competitor strength increases and market competition intensifies; 3) the risk of seasonal fluctuations in revenue; 4) the risk of seasonal fluctuations in revenue; 4) the long repayment cycle increases financial risk.