The company is a comprehensive communication system supplier of communication network equipment and technical solutions. The core network is the “management center” of communication networks. In terms of the integrity of product solutions, only Huawei, ZTE, Nokia Bell, and Zhenyou Technology can provide a full range of core network products, including 4G/5G data core networks, 4GVoLTE/5GIMS voice core networks, and integrated signaling network STP. Other domestic enterprises can only provide departmental telecom-level products or small-capacity products for enterprise internal private networks. The company has a complete IMS voice core solution, which supports a single system with a capacity of more than 5 million lines and a multi-system capacity of 10 million. In terms of independent product innovation, the company has independently developed 5G core network technology through years of technology accumulation, and is currently in the commercialization stage. Among them, the company's products already have the ability to exceed 60 Gbps per user server, and use self-developed cloud technology and mobile edge computing technology to effectively reduce transmission delays and mitigate network blockages.

In terms of satellite communication, the company mainly provides the core network business of satellite communication. The core network is the central and nervous system of the entire satellite communication network. The company is one of the few domestic equipment vendors that can provide 5G core networks for satellites, including high-orbit satellites and low-orbit satellite core networks. At present, the company's satellite core network business has served Tiantong-1 and cooperating satellites in other countries, and has successfully delivered autonomous satellite mobile communication system projects, cooperative satellite mobile communication switching systems and intelligent network system construction projects, satellite Internet core network projects, customized 5G satellite core network projects, 4G and 5G integrated satellite core network projects, and IMS integrated satellite core network projects.

The company's centralized local system products focus on integrated service access gateway (MSAN) series products and passive optical network access (PON) series products. Among them, MSAN is based on twisted-pair copper wire. This type of product is mature and stable, and uses telephone lines to connect to broadband. PON is based on passive optical fiber access. PON technology has become a hot topic of concern for global broadband operators and is considered one of the best technical solutions to achieve FTTH.

The company's revenue has rebounded sharply, and performance has picked up. The revenue portion fluctuated greatly due to the impact of the epidemic and overseas politics in previous years. The 23Q3 company grew rapidly, mainly due to the recovery of overseas business revenue and the construction of domestic satellite internet. The company's net profit returned to mother in '21 and '22 also experienced losses due to the impact, as well as issues such as investment and repayment of R&D expenses. 2023Q3 has already made a profit, and the industry's revenue payments and confirmed revenue were mainly in the fourth quarter.

Investment advice: The net profit for 2023-2035 is expected to be 0.3/0.8/130 million yuan, respectively. Currently, the corresponding PE price is 112.8/37.7/23.8 times, covered for the first time, giving it a “buy” rating.

Risk warning: Project payback is slow; R&D progress falls short of expectations.