Military high-end cable expert, layout optoelectronic information transmission industry
With the military business as the core, the company is mainly engaged in the R & D, production and sales of military optoelectronic cables and components. at present, the products cover aviation, aerospace, shipping, weapons and electronics five major military industrial fields. The company takes the military cable business as the main line, carries out the coordinated development strategy, and successively acquires Quanxin Optoelectronics, Shanghai Saizhi, and distributes the optoelectronic system. At the same time, we will actively explore the business of civilian products, set up full-letter rail transit, open up the high-end cable market of rail transit, and form a useful supplement with the military business.
In April 2019, the company signed a "property rights transaction contract" with Chengfei, and Quanxin Optoelectronics became a wholly owned subsidiary of the company. In the first half of 2020, the revenue was 44.9273 million yuan and the net profit was 6.7352 million yuan. In the future, the company will take the full-letter optoelectronic system as the technical platform to locate the optoelectronic system-level products.
With the growth of investment in national defense and the continuous development of the core business of cable transmission, the localization rate and self-controllable requirements of China's military equipment have increased significantly in recent years, leading to the rapid development of supporting services such as military cables and optical fiber buses. The scale of China's military cable industry is expected to exceed 1.2 billion yuan in 2020. The company's core supporting position in the military cable field is very solid. In the first half of 2020, the company's cable and components (including optoelectronic system products) business income rose to 299 million yuan, an increase of about 11.3% over the previous year. It is expected that in the next few years, the company's cable and component business will deeply benefit from the strong pull of new models, and its performance will maintain rapid growth.
The transfer of Changkang Environmental Protection, the cancellation of Nanjing Sai Chuang, the company set sail again in 2018, the subsidiary Changkang Environmental Protection failed to fulfill its performance promise, and the company set aside 508 million yuan for impairment of goodwill, which is the main reason for the net profit loss of 253 million yuan. In November 2020, the company signed an equity transfer agreement with Sai Ruiou, agreeing to transfer 60% of the equity of Changkang Environmental Protection at a price of 53.4 million yuan. In addition, Nanjing Sai Chuang, a subsidiary engaged in heat transmission business, set aside 3.6 million yuan for impairment of long-term equity investment in 2018 due to poor management. In June 2020, the company has completed the liquidation and cancellation of Nanjing Sai Chuang. The company's adjustment of business extension is conducive to the concentration of superior resources, the realization of resource integration, and the refocus on the main business of optoelectronic information transmission.
Judgment and rating description of industry valuation
It is estimated that the company's net profit from 2020 to 2022 is 149 million, 155 million and 187 million respectively, with a considerable increase in net profit after deducting non-profit, with an EPS of 0.51,0.53 and 0.64 yuan, and the current share price is 30x, 29x and 24x corresponding to PE, maintaining the "recommended" rating.
Risk hint: the risk of military orders falling short of expectations and slow market expansion of civilian products.
