The leading weather radar company gave it a “buy” rating
The company is a leading supplier of full-scale active phased array radars in China, and is one of the few domestic enterprises that can provide “full value chain” solutions. The company is deeply involved in the field of meteorological detection with X-band dual-polarized active phased array radar products. The market share is high, and demand for many subsequent application scenarios is strong. We expect the company to achieve net profit of 148/2.40/350 million yuan in 2024-2026, EPS of 0.96/1.55/ 2.26 yuan, respectively, corresponding to the current share price PE of 67/42/28X, respectively. Comparatively, in 2024, Wind agreed that the average PE value was 73 times. Considering that the company's radar products have a large market space, are more suitable for air road construction needs in the low-altitude economy, and have more room for long-term growth, the company was given 80 times PE in 24 years, corresponding to a target price of 76.80 yuan, which covered the “buy” rating for the first time.
Conventional meteorological radars have poor low-altitude detection capabilities. The company's radar products have strong blind-correction capabilities. China has built a relatively complete meteorological monitoring and early warning system. Among them, meteorological radars are the core hardware products for meteorological detection. Currently, most of China's new-generation meteorological radars are large radars in the S/C band. The company's X-band meteorological radars can well fill the blind spots of S/C band meteorological radars, focusing on detailed monitoring and accurate warning in local areas. According to estimates, the number of S/C band weather radars will reach 282 units in 2025 (detection distance 400 km). Of these, 50% are equipped with X-band radars according to the 1:1 detection range (detection distance 60 km), 987 X-band weather radars are required, and the corresponding market space is about 6.4 billion yuan (unit price 6.5 million/unit).
The low-altitude economy continues to develop. As the low-altitude economy continues to develop, the number of low-altitude aircraft continues to increase. Flight activities are becoming more frequent, and the low-altitude weather environment is more complex and varied. Weather conditions such as low-altitude wind shear pose a serious threat to the safety of low-altitude flight. At the same time, the aerodynamic shape, lift structure and flight performance of low-altitude aircraft vary, and some products are more sensitive to the weather. Therefore, low-altitude flight activities require strong low-altitude weather monitoring and early warning. At the same time, considering the continuous advancement of emerging application scenarios such as urban air traffic, we believe that the company's short-range, high-resolution, and low-cost X-band dual-polarized radar is more in line with the needs of low air weather monitoring and early warning, and is expected to continue to develop along with the low-altitude economy.
With strong technical advantages in the field of meteorological detection, the company actively expands downstream market space in multiple fields. With its own research, it brings rich technical reserves and cost advantages, and actively lays out fields such as water conservancy testing, marine inspection, national defense and military, civil aviation, and automotive. The company launched the world's first C-band microstrip patch antenna dual-polarized phased array weather radar in November 2023, establishing a pioneering advantage in product development and market development; reached a cooperation with the Ministry of Water Resources Information Center to obtain a first-mover advantage in the application of X-band radar in the field of water conservancy monitoring; the forward-looking layout of 77GHz vehicle-mounted 4D millimeter-wave radar conforms to the technical application trend of intelligent driving, and the market space is considerable after mass production.
Risk warning: Risk of high customer concentration, risk of falling short of expectations in fund-raising project progress or operating results, and difficulties in maintaining high gross margins.