Key points of investment:
Incident: According to the company's public account, the company released the KSW-WNS04 wireless channel simulator.
The performance of the KSW-WNS04 wireless channel simulator has improved significantly in parameter indicators. According to the company's official website, the KSW-WNS04 wireless channel simulator, as a simulation device for the wireless channel environment, realizes RF channel interconnection and simulation of dynamic wireless channels. It can help locate performance issues as early as possible during the development cycle, and can meet the testing needs of next-generation radio equipment such as mobile communication, satellite communication, navigation and direction finding, 5G and NTN. The 2~80 channels can be configured to support a maximum of 5120 fading channels, a maximum signal bandwidth of 2 GHz for a single channel, and a maximum aggregation bandwidth of 4 GHz channels with a maximum delay of 3 seconds and a large-scale attenuation range of up to 120 dB to support shortwave, ultra-short wave, L, S, C, X, Ku, and Ka bands.
The field of integrated satellites and sensing is expected to gain strength. 1) According to the company's announcement, the company's various test and simulation instruments can be applied to the satellite field. For example, the company's wireless channel simulator can provide wireless channel simulation of satellite communication for various product companies; RF microwave signal generators can be used to generate various satellite communication signals to test and verify the performance of satellite communication equipment, communication systems, ground station receivers, and channel modeling and simulation. The continuous development of satellite internet-related technology will continue to expand in future application scenarios. On the one hand, it will expand terrestrial communication coverage, including remote area communication, airborne communication, maritime communication, emergency communication, etc.; on the other hand, it will form complementary integration with terrestrial communication, including direct mobile phone connections, vehicle networks, Internet of Things, 5G NTN, etc., and the development, verification, simulation and testing technology support for new technologies, new products and emerging scenarios, and the market prospects are broad. In 2024, the company will also continue to develop and iterate the company's test simulation instruments and solutions around the needs of downstream users and further expand the industry user base. 2) Communication and sensing integration is one of the important evolutionary directions of 5G-A and 6G networks. Application scenarios include smart transportation, smart low altitude, smart living, and smart networks.
Currently, the company's R&D center is developing test and simulation technology and products in the direction of integrated sensing technology. In the future, related test simulation instruments will be launched to provide a laboratory simulation and verification environment for downstream users.
Business performance continues to grow. According to the company announcement in 2023.1) The revenue of radio test and simulation instruments and system solutions is 240 million yuan, yoy +13.1%. The product matrix of high-end radio test and simulation instruments continues to be enriched and core product performance continues to improve, expanding the simulation and testing needs of more industries, and the market share continues to increase; 2) HBI modular components have revenue of 13 million yuan, yoy +87.1%, and some HBI modular products are sold in batches.
The profit forecast was lowered and the “buy” rating was maintained. Considering that the company's RF microwave signal generator continues to optimize the hardware platform and develop higher-frequency products; however, due to product delivery pace issues, we lowered our 24-25 profit forecast and added a 26-year profit forecast. We expect the company's net profit to be 1.15/1.50/199 million yuan in 24-26 (1.62 billion yuan /220 million yuan, respectively). The current stock price (2024/06/24) corresponds to 26X, 20X, 15X, and PEG=0.8 for 24-26, respectively. We selected Puyuan Precision Electronics and Dingyang Technology, which are also in the electronic measuring instrument industry, as comparable companies. According to consistent expectations, the average PE of comparable companies in 24-26 was 27/20/16x, and PEG=1 in 24. The company's valuation was lower than that of comparable companies, maintaining a “buy” rating.
Core hypothetical risks: the promotion of new products falls short of expectations; expansion of production falls short of expectations; the progress of fund-raising projects falls short of expectations.