Summary of the report:
It is rich in satellite resources, and the fixed increase plan will enhance the core strength. The company is the only basic telecom operator with independent controllable commercial communication and broadcasting satellite resources in China, and has an absolute competitive advantage in the domestic market. The company currently operates 15 communications satellites, including 2 high-throughput satellites, and is expected to launch at least six new satellites between 2021 and 2023. At present, the company's plan for increasing the number of satellites has been approved by SASAC and will raise no more than 3.3 billion yuan for three of the newly launched satellites.
High-throughput satellite technology brings new opportunities to the industry. High-throughput satellites use new technologies such as multi-beam, which can achieve several times or even dozens of times the data throughput of traditional communication satellites, which is a new opportunity for the communication satellite operation industry. Following the development direction of the industry, the company launched China Star 16 and Asia-Pacific 6D in 2017 and 2020 respectively, which is China's first and second high-throughput satellite, with a total communication capacity of more than 20g and 50G respectively, filling the gap in China's high-throughput satellite market. The increase in the proportion of high-throughput business will lead to the growth of revenue, gross profit margin and so on.
The high-definition satellite radio and television market is full of new vitality. Satellite radio and television is an important application field of satellite communications. The upgrading of high-definition programs will put forward higher requirements for satellite communication capacity and make the market coruscate new vitality. The company has started the replacement star project of Zhongxing 6A, 6B and 9A in the C/Ku band, which will better meet the needs of future radio and television users to carry out high-definition and ultra-high-definition program transmission and promote business growth.
Satellite Internet has been incorporated into the new infrastructure, and the company has developed marine and aviation Internet services. In April 2020, the National Development and Reform Commission made it clear that satellite Internet is the representative of communication network infrastructure in the information infrastructure within the scope of the new infrastructure. The company has actively developed marine and aviation Internet business, officially launched the "Sea Star Tong" high-throughput satellite ocean service products, and jointly funded the establishment of a professional subsidiary, Star Interconnection, which specializes in providing aviation Internet, and completed the maiden flight of China's first Ka-band broadband satellite Internet aircraft. The Internet penetration rate of aviation in China is only 5%, which is far lower than 80% in the United States. the domestic market has a broad space and will become an important growth point for the company's performance in the future.
Profit forecast: the company's operating income from 2020 to 2022 is expected to be 27.75,28.58 and 3.001 billion yuan, the net profit from its parent is 4.83,5.15 and 559 million yuan, and the EPS is 0.12,0.13,0.14 yuan, and the corresponding share price EV/EBITDA is 27.10,24.94,23.86 times. As a communications satellite operator with absolute competitive advantage in the domestic market, the company, benefiting from high-throughput satellite development and satellite Internet construction, has been given a "buy" rating for the first time, with a six-month target price of 20 yuan.
Risk hints: systemic risk, risk of falling prices due to intensified international market competition, lower-than-expected high-throughput market expansion, satellite launch failure or major failure in orbit.