Core views:
Incidents & Comments: On November 28, the company issued the “Notice on Signing Major Contracts”. The subject of the contract is the XX rubidium clock module, the contract amount is 100.47 million yuan, and the contract performance period is 2024-2026. The contract amount signed this time accounted for 8.30% of the company's audited main business revenue in 2022. The execution of the contract will have a positive impact on the company's financial situation and operating results from 2024 to 2026.
Core investment logic: (1) At the end of the pattern, the company is deeply involved in time-frequency and Beidou satellite application products. It has a rich product range, covering atomic clocks, crystal devices, frequency components and equipment, time-synchronization products and Beidou satellite watches, has many patents and core technologies, and has deep customer resources; large orders for atomic clocks are expected to strengthen the company's market position in the field of time-frequency products and enhance the company's market competitiveness and profitability; (2) Revenue side, “14th Five-Year Plan” equipment requirements and defense informatization construction and development are accelerating, and the company's development of airborne, ballistic and defense informatization Supporting time frequency products It is expected that the boom will rise; the construction of satellite Internet, etc. is driving up demand for products such as the company's space-borne atomic clock and high-stability crystal oscillator. According to the semi-annual report of '23, the company's miniaturized space-borne rubidium atomic clock won the bid for the “Starnet” project, laying a good foundation for batch support for low-orbit Internet satellites and expanding the company's low-orbit Internet satellite market. The main business is expected to usher in a new round of growth; (3) Profitability, it is expected that demand for downstream low-orbit satellites and missiles will continue to expand in the future, along with the gradual release of production capacity from the company's fund-raising projects and the effects of large-scale industrialization projects. Capabilities are expected to improve steadily.
Profit forecast and investment recommendations: The EPS for 23-25 is expected to be 0.41, 0.52, and 0.68 yuan/share, respectively. Optimistic about the company's leading position in time-frequency devices and Beidou satellite application products, benefiting from the country's time-frequency system construction, downstream demand continues to expand. Combined with the release of production capacity to help improve the company's profitability, the company was given a PE valuation of 45 times over 24 years, corresponding to a reasonable value of 23.61 yuan/share, giving it an “increased holdings” rating.
Risk warning: frequent market competition intensifies; policy adjustment risks; market development falls short of expectations.