ST Navigation states that due to large fixed cost expenditures such as personnel salaries, depreciation of factory buildings, and amortization of land use rights, it is expected to continue to operate at a loss in 2024. The company's high-precision and high-reliability inertial navigation systems, acceleration measurement modules and other products currently under research and development, design and production can be used in the commercial aerospace field, and relevant products are being verified according to customer requirements.
"Science and Technology Innovation Board Daily" news on July 4 (Reporter Wu Xuguang) In the evening of July 3, *ST Navigation replied to the 2023 annual report inquiry letter issued by the Shanghai Stock Exchange earlier.
The reply mentioned above involves core issues such as the reasons for the continuous decline or loss of other parts business revenue of the company, whether related income is sustainable, and performance expectations for 2024.
*ST Navigation is a discipline-based company established by Beijing Institute of Technology in 2016 to implement technological achievements transformation, and the company's main products are inertial navigation systems, core components of inertial navigation systems, and technical services.
Does the company's main business have sustainability? The inquiry letter mentioned that *ST Navigation's operating income in 2023 was 21.4495 million yuan, a year-on-year decrease of 89.37%. Among them, the sales of other parts achieved revenue of 18.6158 million yuan, and the business gross profit margin was only 4.22%.
The Shanghai Stock Exchange requested the company to explain: the main content of *ST Navigation’s other parts business, the relationship and cooperation history with the trading party, the pricing method, the reasons and rationality of the low gross profit margin, and the performance expectations for 2024, combined with the company’s in-hand orders, post -income realization and Unisoc Electronics business conditions.
*ST Navigation replied that the low gross profit margin in 2023 was mainly due to two reasons: first, due to less orders in 2023, the production order was not saturated, resulting in a cost of idle labor hours of 2.2785 million yuan; second, in order to obtain future orders The company proactively adjusted the unit price of company product sales. In 2023, its gross profit margins for cooperation projects with Unit P and Unit O were 8.73% and 3.99%, respectively, leading to an overall decline in gross profit margin.
"If the above special project factors are excluded, the gross profit margin of other parts business in 2023 that did not allocate idle labor costs is 30.27%, which is at a reasonable level." *ST Navigation added.
It should be noted that because the company’s net profit for 2023 is lower than negative, and the business income after deducting non-related main business for 2023 is less than 0.1 billion yuan.
*ST Navigation's 2024 performance expectations have also received attention from investors and regulators.
"With the official signing of other orders of interests and the new customer field, business income is expected to further increase." *ST Navigation replied that in the first quarter of 2024, the company achieved operating income of 11.3169 million yuan. Considering the uncertainty of customer A's 2023 order notification-related income, it is expected that revenue will reach 0.122 billion yuan to 0.221 billion yuan in 2024. In addition, in April 2024, the company has completed the acquisition of Unisoc Electronics. It is expected that the revenue range of Unisoc Electronics from May to December 2024 will be 46.591 million yuan to 81.1158 million yuan.
However, *ST Navigation also stated that the company's operating performance in 2024 is uncertain and there is a risk of sustained losses. Due to large fixed cost expenditures such as personnel salaries, plant depreciation, and land use rights amortization, it is expected that losses may continue in 2024.
The "Science and Technology Innovation Board Daily" reporter noted that while expanding into the military industry market, *ST Navigation has also entered downstream market applications in civilian products in recent years. It is reported that the company has developed products that are suitable for applications in scenarios such as drones, unmanned ships, automatic driving, energy exploration, and surveying and mapping.
On **** of this year, *ST Navigation stated on the investor interaction platform that the high-precision and high-reliability inertial navigation system, acceleration measurement module, attitude gyro combination system, and other products currently being researched, designed, and produced by the company can be used in the commercial aerospace field, and related products are undergoing verification work according to customer requirements.
Regarding the impact of downstream market demand on the company's performance, the scale of income in the civilian market and other situations, the "Science and Technology Innovation Board Daily" reporter called *ST Navigation several times today (July 4), but the company's securities department The phone has been in an unresponsive state.