Core ideas:

Incident: The company disclosed its quarterly report for the first three quarters, achieving cumulative revenue of 3.767 billion yuan (YoY -6.66%), net profit of 0.185 billion yuan (YoY -48.43%), net profit of 0.083 billion yuan (YoY -70.62%), gross profit margin 29.97% (YOY-3.78pps), and a net profit margin of 5.77% (YOY-3.38pps) for the first three quarters.

Comment: Investment in R&D has increased, and I am optimistic about the layout of cooperation with China Mobile “Beidou+”. In the third quarter of a single quarter, we achieved revenue/return to mother/net profit of 1.175/-0.011/-0.025 billion yuan, with year-on-year changes of +1.46%/-123.10%/-185.71%, respectively.

-18.79%/-107.11%/-129.64%, gross profit margin 25.23%, down 7.97 percentage points year on year, down 7.06 percentage points from month to month, net profit margin -0.54%, down 4.91 percentage points year on year, down 12.34 percentage points from month to month. On the cost side, the cost rate for the reporting period was 27.56% (YOY+2.54 PPS), mainly due to a 2.51 percentage point increase in R&D expenses. On the asset side, inventory at the end of the reporting period was 1.354 billion yuan, a decrease of 16.41% from the beginning of the year; accounts receivable were 6.032 billion yuan, an increase of 13.09% from the beginning of the year; contract assets were 1.299 billion yuan, an increase of 48.51% from the beginning of the year, mainly due to the impact of project acceptance in the fourth quarter. According to the three-quarter report, China Mobile Capital recently negotiated and recommended a China Mobile manager to Guangzhou Digital Technology Group, the controlling shareholder of the company, as a candidate for the company's director in order to increase the expansion of business cooperation between the two sides. As of September 30, 2024, China Mobile Capital held 1.97% of Haige Communications shares. According to the investor relations activity record table of August 27, 2024, the company and China Mobile carried out business collaboration in the fields of “Beidou+” industry application expansion, low-altitude infrastructure network layout, and space-space integration and collaborative development.

Profit forecast and investment advice: EPS is expected to be 0.24, 0.34, and 0.48 yuan per share for 24-26, respectively. The company is optimistic that the company will benefit from China's aerospace informatization construction and continued development in fields such as “Beidou+”, low-orbit satellites, and low altitude. Referring to comparable company valuations, they are given a PE valuation level 60 times over 24 years, corresponding to a reasonable value of 14.29 yuan/share, and maintain the “gain” rating.

Risk warning: Listings fall short of expectations, major policy adjustments, market development and fundraising fall short of expectations.