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On the 28th, the company released its 2019 annual report. It achieved annual revenue of 2,206 million, an increase of 56.23% over the previous year, and achieved net profit of 280 million yuan to the mother, an increase of 83.46% over the previous year.

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Military-driven performance grew rapidly. On the 28th, Yaguang Electronics exceeded its performance promise. The company released its 2019 annual report. It achieved annual revenue of 2,206 million, an increase of 56.23% over the previous year, and achieved net profit of 280 million yuan, an increase of 83.46% over the previous year.

In 2019, Chengdu Yaguang achieved operating income of 1,723 million yuan, an increase of 59% over the previous year, net profit of 428 million yuan, an increase of 83% over the previous year, and net profit of Fumo after deduction was 321 million yuan, an increase of 41.41% over the previous year. Non-recurring profit and loss is mainly for the company to report that claims losses arising from providing guarantees to its atomic company Chengdu Xinhuaxin during its history were deducted before income tax. It was confirmed that Chengdu Yaguang Electronics had accrued 40.26 million yuan in current income tax expenses in 2018 and that deferred income tax expenses corresponding to deductible losses for subsequent years were 55.22 million yuan.

The traditional military electronics business continues to grow rapidly. The satellite internet will bring new volume. In 2019, the company's technological innovation, new products and processes all achieved new results, including the successful development of T/R components for a new radar project, the supporting definition of millimeter wave security gates, etc. The newly developed L/C/X band inverter series packages and S/C/X band T/GaN packages were mass-produced, and the traditional military electronics business continued to grow rapidly.

Satellite internet is being incorporated into the new infrastructure. In terms of satellite internet, the company coped with the rapidly increasing satellite component business, further increased the OEM line production capacity of the Fifth Academy of Aerospace Science and Technology, and implemented the construction of a process control capability system for the five institutes of aerospace science and technology. Furthermore, the joint laboratory jointly built by the company and the Second Academy of Aerospace Science and Technology was successfully unveiled to meet the rapidly increasing demand for ball-borne and space-borne core microsystem products. In the future, the construction of satellite Internet in China will bring new growth points to the company's performance.

Self-developed chip technology has broken through a sharp increase in export sales, further consolidating its position in the industry, and Yaguang Electronics began chip design in 2008. The subsidiary Huaguang Ruixin, established in 2010, is already a first-class RF chip R&D manufacturer in China. In 2014, the company jointly invested with San'an Optoelectronics and others to build chip production lines for gallium arsenide, gallium nitride and other materials.

Huaguang Ruixin's main products are microwave RF chips and high-speed analog chips made using GaAs PHEMT/HBT, GaN HEMT, CMOS, and SiGe BiCMOS processes. The frequency coverage reaches DC-100GHz. It has unique advantages such as frequency bandwidth, low power consumption, high integration, low cost, and short supply cycle. It has formed various special products such as ultra-broadband and low power consumption series. It can also provide circulator isolators and millimeter microwave components. These products have been widely used in market fields such as 5G, wireless communication, automotive electronics, and the Internet of Things.

The company's export chips grew rapidly in 2019. In addition to meeting its own demand for components, components and other products, Yaguang Electronics Division's self-developed chips grew from 7 in 2018 to more than 100, and the number of models sold increased from 36 in 2018 to close to 200; shipments of Huaguang Ruixin's self-developed chips in 2019 also increased 196% year-on-year. Chip design capability is one of the core competencies in the field of microwave components. The export sales of the company's self-developed chip technology have increased dramatically, further consolidating its position in the industry.

Stock options were granted for the first time, linking the interests of employees and the company

On March 4, the company granted 47.95 million stock options to 132 incentive recipients who met the award conditions. The exercise price was 7.84 yuan per share. The annual performance assessment target for stock options is 2018 as the base year, with revenue growth rates of no less than 30%, 40%, and 50% respectively in 2020-2022.

The setting of assessment indicators is conducive to mobilizing the enthusiasm and creativity of motivators, ensuring the achievement of the company's future development strategies and business goals, thereby bringing more returns to shareholders.

Profit forecasting and investment ratings: The military electronics business has maintained relatively rapid growth. Satellite internet has brought new volume, maintained increased holdings, and the company's military electronics business has a rich heritage, demand in the downstream market is strong, and performance is expected to continue to grow rapidly; satellite internet is included in new infrastructure, and the company cooperates closely with the Fifth Downstream Aerospace Academy and the Second Aerospace Academy, bringing new performance growth points. The company's net profit from 2020 to 2022 is expected to be 363, 492, and 663 million yuan respectively, up 29.47%, 35.79%, and 34.65% over the previous year. EPS is 0.36, 0.49, and 0.66 yuan respectively. Corresponding to the current stock price PE is 28, 21, and 16 times, respectively, maintaining the increase rating.