Incident The company published its annual report for the year 2023. Revenue of $726 million was achieved in 2023, down 23.85% from the same period last year. Net profit attributable to shareholders of the parent company was 102 million yuan, a year-on-year decrease of 34.66%.
Key points of investment
Business volume declined briefly, with revenue falling 23.85% year over year: The company achieved revenue of 726 million yuan in 2023, down 23.85% from last year, mainly due to reduced industry policies, market demand and product delivery in 2023. Net profit attributable to shareholders of the parent company was 102 million yuan, a year-on-year decrease of 34.66%, mainly due to a decrease in product delivery and a decrease in operating income in 2023. Net cash flow from operating activities increased by 208.50% over the same period last year, mainly due to increased sales repayments in 2023. Net assets attributable to shareholders of listed companies increased by 178.63% over the same period last year, mainly due to the receipt of funds raised from the initial public offering of shares in 2023.
The initial public offering of shares in 2023 has always been centered on customer needs: In 2023, the company initially issued 84,312,701 RMB common shares, and the company's shares were listed on the Shanghai Stock Exchange Science and Technology Innovation Board on May 18, 2023. The company's basic earnings per share and diluted earnings per share in 2023 were 0.34 yuan/share, and net assets per share attributable to shareholders of listed companies at the end of 2023 were 7.91 yuan/share. If calculated based on shares before issuance, the basic earnings per share and diluted earnings per share in 2023 were 0.41 yuan/share, and the net assets per share attributable to shareholders of listed companies at the end of 2023 were 10.55 yuan/share. The company always takes customer needs as the center, keeps up with technological development trends, actively carries out product development and innovation, and continuously provides customers with radar equipment with advanced technology and reliable performance.
Insist on strengthening R&D strength and focus on cultivating R&D teams: In 2023, the company invested 140.3494 million yuan, accounting for 19.34% of revenue; by the end of 2023, the company had obtained 48 invention patents (including 2 national defense invention patents) and 81 utility model patents; in 2023, it was approved as a national industrial design center, as well as the Hubei Early Warning and Detection Technology Engineering Research Center, National Defense Science and Technology Innovation Center. At the same time, the company attaches great importance to the training and introduction of R&D personnel, and has established a R&D team with deep professional background, strong innovation ability and experienced development experience. By the end of 2023, the company had 361 R&D personnel, accounting for 43.03% of the total number of employees. In addition, the company actively carries out industry-university-research cooperation with universities such as Xi'an University of Electronic Science and Technology to continuously introduce, digest and absorb new technologies and achievements, providing important support for the company's overall innovation and development.
Profit forecast and investment rating: The company's performance is in line with expectations. Although the current industry order fluctuation pressure is high, the company is developing China's scarce air defense warning radar equipment, and is expected to benefit from new business in the low-altitude economy in the future. We lowered the company's net profit forecast values for 2024-2025 to 1.26/151 million yuan (previous value: 257/326 million yuan), and added a net profit forecast value of 202 million yuan for 2026. The corresponding PE is 52/44/32 times, respectively, and still maintains a “buy” rating.
Risk warning: 1) technology research and development risk; 2) risk of brain loss; 3) risk of high customer concentration; 4) risk of relatively single product structure; 5) management risk due to scale expansion.