Introduction to this report:

The net interest rate increased by 1.96pcts to 17.0% year-on-year, the highest level in history. The company's T/R component business blossomed, and the application field expanded to low-orbit satellites and commercial aerospace, providing new impetus for the company's subsequent development.

Key points of investment:

The target price was lowered to 90.00 yuan to maintain the increase in holdings. Demand in the downstream traditional aerospace sector of the company's TR component sector has fluctuated, and the pace of downstream base station construction has slowed down to 2024-26 EPS to 1.69/1.91/2.27 yuan (previous EPS value of 2.07/2.61 yuan in 24,25, additional EPS 2.27 yuan added), 53 times PE for 24 years, and a target price of 90.0 yuan to maintain an increase rating.

The TR component business grew steadily, and the net interest rate reached a record high. In 2023, the company achieved revenue of 3,567 billion yuan, yoy +3.08%, net profit to mother of 606 million, yoy +16.47%, gross profit margin 32.28%, +1.61pcts; net profit margin 17.00%, +1.96pcts, a record high. By product: 1) T/R components and RF modules: achieved revenue of 3.38 billion yuan, yoy +7.6%. Growth slowed due to adjustments in the downstream traditional aerospace sector. Gross margin +2.69pcts to 31.9%. 2) RF chips: achieved revenue of 130 million yuan, yoy -53.0%; gross margin -9.07pcts to 33.5%; 3) Other chips: achieved revenue of 50 million yuan, yoy -7.1%; gross profit ratio - 0.92ppt to 57.1%,

Expand the field of space-borne TR components and mobile communication terminals, and gradually develop efforts in multiple dimensions. 1) In the field of mobile communication terminals, the company's various RF integrated circuits have been applied to 5.5G integrated base stations, WiFi, mobile phone PA and other RF amplification chip products, and the performance has reached the advanced level in China. 2) The company expanded the application field of T/R components and began to deliver various products to customers in the fields of low-orbit satellites and commercial space. The company's multi-dimensional efforts are expected to usher in new growth points.

Catalyst: Accelerating the construction of satellite internet.

Risk warning: Risk of fluctuations in the growth of major downstream customers.