Incident: The company released the 2023 annual report and the first quarter report of 2024. In 2023, it achieved operating income of 255 million yuan, an increase of 15.08% over the previous year, and achieved net profit of 87.1 million yuan, an increase of 7.20% over the previous year.
The first quarter of 2024 achieved operating income of 24.81 million yuan, an increase of 28.74% over the previous year; realized net profit of 3.4 million yuan to mother, an increase of 10.82% over the previous year.
New products have been introduced, and gross profit margins have steadily increased. In 2023, the competitive advantages of the company's leading products, wireless channel simulators, continued to be highlighted. With the continuous iteration of comprehensive performance and functions, they gradually formed important breakthroughs in markets such as satellite communications and semiconductor testing; RF microwave signal generator products became more mature, continued to be recognized by downstream users, and order volume grew rapidly, contributing significantly to the company's performance; the new product spectrum/vector signal analyzer was gradually introduced into various downstream users for testing and trial use, and certain orders were formed; the performance of general receivers and other products under the HBI architecture gradually reached the level of overseas competition. The company expects to launch higher-performance wireless channel simulators and RF microwave signal generators in 2024, and accelerate test iterations of vector network analyzers to lay the foundation for new product launches. From 2021 to 2024Q1, the company's gross margin was 63.01%, 66.47%, 68.01%, and 68.93%, showing a continuous upward trend.
The HBI platform builds a common technology foundation, and satellite internet and low-altitude flight have great potential. The HBI platform built by the company provides a generalized and standardized hardware guarantee for the individual needs of different radio test and simulation application scenarios. It can quickly develop test simulation products that meet the needs, reducing the R&D cycle and R&D costs. Based on the general technology base, the company's comprehensive testers can be used for satellite Internet, and general receivers and airborne processing equipment can be used in flight tests and other fields. The HBI platform opens up ground, low altitude, and space full-space communication testing applications, and accelerates the pace of new product launch.
Investment proposal: The company is a leader in high-end radio testing instruments in China. In the early stages, it relied on technology accumulation to strategically lay out high-end products, and realized the reuse of RF technology through the construction of an HBI bus platform, continuously promoted new product research and development, and opened up a broad market for general instruments. We predict that the company will achieve operating income of 3.36, 4.39, and 578 million yuan in 2024-2026, and achieve net profit of 1.18, 1.59, and 216 million yuan, corresponding to PE of 24x, 18x, and 13x, maintaining the “increase” rating.
Risk warning: the risk that demand for radio simulation testing will not grow as expected; the risk of new product promotion falling short of expectations; the risk of limited outsourcing of core components.