Key points of investment

Next Wednesday (August 7), a GEM listed company “Guoke Tiancheng” will ask for a quote.

Guoke Tiancheng (301571): The company is a high-tech enterprise with military qualifications such as scientific research and production licenses for weapons and equipment, and is mainly engaged in R&D, production, sales and service in optoelectronic fields such as infrared thermal imaging. The company achieved operating income of 0.328 billion yuan/0.53 billion yuan/0.702 billion yuan respectively, with YOY of 66.37%/61.58%/32.49%; realized net profit to mother 0.075 billion yuan/0.097 billion yuan/0.127 billion yuan, and YOY of 56.34%/30.05% in that order. In the latest reporting period, from January to June 2024, the company achieved operating income of 0.377 billion yuan, an increase of 38.83% over the previous year; realized net profit of 0.057 billion yuan to mother, an increase of 42.43% over the previous year. According to the company's management's preliminary forecast, the company's revenue for January-September 2024 is expected to increase by about 43.79% over the same period of the previous year, and net profit to mother will increase by about 47.86% over the same period of the previous year.

Investment highlights: 1. The company is one of the few domestic manufacturers with the capacity to mass-produce InSb refrigeration infrared products at this stage, and has a strong competitive advantage in the refrigeration infrared market. The company is one of the few domestic enterprises with the ability to develop and produce high-resolution refrigerated infrared products such as 1280 x 1024, and is different from the MCT detector path selected by most domestic infrared manufacturers. The company's refrigerated infrared products mainly use the more difficult InSb detector path, which has low blind rate and high stability in the mid-wave band, and can be widely used in military fields with high performance requirements such as border control and surveillance equipment and satellite optical loads; up to now, the company and China Telecom Group, China Shipping Group, Chinese Academy of Sciences, etc. Military supporting enterprises such as large military groups and units affiliated with scientific research institutes have all established stable and good cooperative relationships. At this stage, there is still plenty of room for improvement in the penetration rate of infrared products in China's military compared to developed countries. Against the backdrop of accelerated modernization of weapons and equipment, demand for military infrared products is expected to grow rapidly. As a manufacturer of InSb refrigeration infrared products that are scarce in the industry, the competitive pattern is good; according to the company's prospectus, if MCT infrared manufacturers transform and develop the InSb type technology route, it usually takes at least 2 years from R&D to mass production; in addition, the company has also locked in most of its production capacity by establishing strategic cooperation with upstream InSb detector core suppliers and exercising priority purchasing rights, which limits the development of InSb infrared products by other manufacturers to a certain extent. 2. The company actively expands into the field of upstream core devices, forwardly lays out T2SL refrigeration detectors, lens and other products, and establishes corresponding production and processing capabilities. 1) In the field of detectors, the company focuses on introducing T2SL refrigeration detectors; T2SL refrigeration detectors are next-generation refrigeration detectors after MCT and InSb. They have characteristics such as high quantum efficiency, high frame rate, and high sensitivity, and are more advantageous in long-wave bands and complex background application scenarios. The company has a forward-looking layout and successfully developed a T2SL refrigerated detector in 2023, becoming one of the few domestic enterprises with T2SL detector development capabilities. It has now reached cooperation intentions with China Aviation Industry Group F0001, Micro-Nano Starry Sky and other customers in the airborne and space-borne fields; according to the company's prospectus, the company already has small-batch production capacity for T2SL refrigerated detectors, and is expected to be put into production within 2025. 2) In the field of lens lenses, the company invested in the construction of a precision optical processing line for the subsidiary Tianyu Optoelectronics and put it into use in 2023. Currently, Tianyi Optoelectronics has the production and processing capacity of various types of infrared lenses and has begun to promote and sell them to the market. Furthermore, the fund-raising project “Ultra Precision Optical Processing Center Construction Project” will continue to focus on lens lenses, and is expected to obtain 16,000 pieces/year of high-end optical lens production and processing capacity after construction.

Comparison of listed companies in the same industry: Currently, the strongest private infrared companies in China mainly include listed companies such as Gaode Infrared, Dali Technology, Ruichuang Weina, Jiuzhiyang, and Fujiri. Looking at the comparable companies mentioned above, the average revenue of comparable companies in 2023 was 1.441 billion yuan, the comparable PS-TTM (excluding outliers and arithmetic average) was 6.46X, and the gross sales margin was 39.24%. In comparison, the company's revenue scale was lower than the average of comparable companies, and the gross sales margin was in the middle to high range of the same industry.

Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.