Key points of investment
Events: In the first three quarters of 2023, the company achieved operating income of 4,035 billion yuan, an increase of 8.79% over the previous year; net profit of 359 million yuan, a decrease of 9.30% over the previous year; net profit after deduction of 281 million yuan, a decrease of 7.59% over the previous year. On a quarterly basis, 2023Q3 achieved revenue of 1.158 billion yuan, a year-on-year decrease of 5.43%, a decrease of 37.16% over the previous year; net profit of 472.196 million yuan, a year-on-year decrease of 54.53%, a decrease of 82.45% over the previous year.
In the first three quarters of 2023, the company's gross profit margin was 33.75%, a year-on-year decrease of 1.66pct; the net profit margin was 8.89%, a year-on-year decrease of 1.77pct; and the weighted average return on net assets was 3.36%, a year-on-year decrease of 0.47pct. 2023Q3, the company's gross profit margin was 33.20%, up 2.20pct year on year, down 1.84pct; net profit margin was 4.08%, down 4.40pct year on year, down 10.53pct from month on month.
In the first three quarters of 2023, the company's total period expenses were 1,010 billion yuan, up 8.81% year on year, accounting for 25.02% of total revenue, and revenue increased by 0.01pct year on year. Among them, R&D expenses were 651 million yuan, up 5.98% year on year, accounting for 16.13% of total revenue, and revenue decreased by 0.43 pct year on year. The total period expenses of the 2023Q3 company were 344 million yuan, up 10.98% year on year, down 2.65% month on month, accounting for 29.71% revenue, up 4.39 pct year on year, and 10.53 pct over month. Among them, R&D expenses were 230 million yuan, up 12.97% year on year, up 9.58% month on month, R&D expenses accounted for 19.82% of revenue, up 3.23 pct year on year, and 8.45 pct month on month.
In the first three quarters of 2023, the net cash flow from the company's operating activities was -954 million yuan, a year-on-year decrease of 211 million yuan, mainly due to changes in the value-added tax exemption method, which led to a year-on-year increase in current taxes and fees and a year-on-year increase in R&D investment and business development expenses in new fields; net cash flow from investment activities was -257 million yuan, a year-on-year decrease of 180 million yuan, mainly a year-on-year increase of 180 million yuan in net purchases of wealth management products and a year-on-year increase in investment in construction projects; net cash flow from fund-raising activities was 356 million yuan, an increase of 444 million yuan Yuan, mainly new growth in the current period, short-term loans increased year over year.
The company raised 1.86 billion yuan and will invest in the “Beidou+5G” integrated R&D industrialization project, satellite Internet R&D and Tianshu R&D center construction project, and Tianteng unmanned information industry base project. Guangzhou Radio Group, the controlling shareholder of the company, and Pingyun Industrial Investment, a wholly-owned subsidiary of the company, subscribed 26.02% of the total number of shares issued by the company (maintaining the ratio of shares held in listed companies before and after issuance). In addition, investors such as China Investment Capital, a wholly-owned subsidiary of China Mobile, the Beidou Seven Star Equity Investment Fund under the Ordnance Group, Guohua Satellite Application Industry Fund under Aerospace Science and Technology, Poly Defense Equity Investment under Poly Group, and Guangzhou's state-owned Guangzhou Industrial Investment are eligible for this offering. The company now issued 177 million shares of common stock (A shares) to 11 specific targets. The issue price is 1,046 yuan/share, and the total capital raised is 1,855 billion yuan. After deducting issuance fees (excluding VAT), 13.820,500 yuan, the actual net capital raised was 1,842 million yuan.
We adjusted our profit forecast. It is estimated that the company's net profit from 2023-2025 will be 740/8.72/1,024 million yuan, and EPS will be 0.32/0.38/0.44 yuan/share, respectively. The PE corresponding to the closing price of November 6 will be 39.1/33.1/28.2 times, maintaining the “increase in holdings” rating.
Risk warning: military orders fluctuate or gross margin falls; the development of the Beidou civilian market falls short of expectations; operator network optimization market competition is fierce.