Event: On July 4, 2024, the company announced the official release of the self-developed Ku-band dual-polarized active phased array radar. The company's product expansion (from X band expansion to C/S/Ku band) +downstream expansion (from meteorology expansion to water/low altitude/civil aviation management/military) logic continues to be interpreted!
Function: Multi-function integrated radar to achieve “low small and slow targets” + “low altitude microweather”. In complex urban environments, the radar can actively detect, identify, track and locate “low, small and slow targets” such as flying birds and drones within a range of 5 km, and can also provide three-dimensional low-altitude micrometeorological information with ultra-high spatio-temporal resolution within 30 km. It can be widely used in various fields such as three-dimensional traffic, border protection, airspace management, etc., and can be further expanded and applied to scenarios such as coastal and sea surveillance and airport bird repelling. It is a new product for low-altitude economic development application scenarios.
Our point of view:
1) The company became the chairman unit of the Zhuhai Low Altitude Alliance in November 23. Facing the urgent needs of government departments for low-altitude infrastructure, a new Ku-band low-altitude special phased array radar was released in July 24, fully reflecting the understanding and innovation that the company had previously shown in facing the needs of the meteorology and water conservancy departments.
2) The recent low-altitude infrastructure plan in Zhuhai clearly includes phased array radars, and recently the company quickly launched integrated meteorology and surveillance products for low-altitude infrastructure based on its deep cultivation in the meteorological field. We expect that competitiveness will far exceed single-function mechanical radars. We are optimistic about the company's low-altitude business. The company has grown with the low-altitude economy of the Greater Bay Area, which is a national benchmark, and is expected to maintain a leading position in the new low-altitude phased array radar market.
3) Ku band phased array radar is widely used in military and satellite fields, and is expected to open up room for the company's growth. In the military industry, according to the Guangyan Tribe official account, the Ku band radio frequency system can provide early warning information for defensive weapons. Whether in a fixed position or on an aircraft, the system can be built in less than 30 minutes. On May 12, 2020, the US Thor Missile Defense Company announced that its Ku band radio frequency system (KuRFs) and Ku720 radar completed 1.5 million hours of combat missions on the battlefield, providing the US Army with critical detection, identification, and interception capabilities. In the satellite field, the first domestic commercial Ku band phased array radar imaging satellite successfully entered the scheduled orbit in 2024. The Ku band has a shorter wavelength and is an important trend in the development of space-borne SAR, which can meet the specific needs of users such as high-resolution ground observation and moving target monitoring. Its detailed imaging characteristics are closer to optical imaging, and can solve early identification of hidden disaster hazards in areas where conditions are complicated and ground surveys are difficult to reach, and provide long-wave synthetic aperture radar data with wide coverage, high measurement point density, and high repetitive observation frequency. Its intelligent on-board processing system can quickly generate images in orbit, and can quickly detect and identify maritime and airport targets.
Investment proposal: The company is a domestic civilian phased array radar expert. It has benefited from the construction of a meteorological phased array radar network+treasury bond water rain radar construction in the short term. In the medium term, it has benefited from the construction of low-altitude economic meteorological and surveillance networks and the replacement of domestic air traffic control radars. It is expected to enter a larger military defense phased array radar market in the long term. The company sold 29 phased array radars in '23. We expect the 24/25/26 sales target to be 80 units/140 units/180 units, and the net profit for 24/25/26 is 0.277/0.55/0.744 billion yuan. The current price is 40/20/15xPE for 24/25/26, respectively, maintaining a “buy” rating!
Risk warning: technology iterative innovation risk, high customer concentration risk, risk of application scenario commercialization falling short of expectations, supply chain risk.