Revenue doubled in the first half of the year, and it is expected that in the second half of the year, the company's breakthrough application of infrared guidance in hypersonic missiles and technological upgrading of heavyweight models will gradually fall to the ground, and 2021 is expected to usher in a year of achievement; join hands with the Nine Nuclear Academy to focus on the layout of laser countermeasure systems, and it is expected to create a new growth pole for the company's performance in the future. Maintain the company's 2021-23 EPS forecast of 0.98,1.56,2.00 yuan, maintain the target price of 93.24 yuan, corresponding to the 2021 95 times PE valuation, maintain the "buy" rating.

Revenue doubled in the first half of the year, and 2021 is expected to usher in a year of performance. On August 9, 2021, the company disclosed the 2021H1 results announcement. During the reporting period, the company achieved revenue of 75.8626 million, an increase of 123.65% over the same period last year, an increase of 23.45% over 2019H1; corresponding to a net profit of 12.5762 million, a year-on-year reversal of losses, an increase of 112.80% over 2019H1. The high performance increase is mainly due to the return to normal of the company's business activities and the high growth of batch production and R & D products. The single-quarter gross profit margin / net profit margin of the company's 2021Q2 is 41.79% / 6.69% respectively, which is significantly lower than that of Q1, mainly due to the fact that the shipments of Q2 are mainly focused on R & D products and civilian products, which is slightly lower than that of Q1 batches of guided products, resulting in a net profit margin lower than market expectations. Looking forward to H2, we expect the company's breakthrough application of infrared guidance in hypersonic missiles and technological upgrading of heavyweight models will gradually fall to the ground, and 2021 is expected to usher in the year of achievement.

The high scene of optical guidance continues, and the supporting products of key models are promoted in an orderly manner. Under the guidance of preparation, missiles, as core equipment with strong consumption attributes, are expected to maintain a high economy in the next 3-5 years. As the leader of optical guidance, the company will fully benefit from the gradual upgrading of the current stock missile to infrared / radar dual-mode guidance and the demand-side main logic brought about by infrared guidance in new models. During the reporting period, the company continued to optimize a number of optical guidance products developed by the overall unit, and successively entered the stage of small batch production; in line with the needs of the overall unit and the military, the company actively participated in the demonstration and development of a number of key models; the developed foreign trade TV guidance products, low-cost infrared guidance products and laser guidance products have achieved success with the overall unit shooting range flight test. Optical guidance products are promoted in an orderly manner, and it is expected that the follow-up will smoothly enter the stereotyped batch production stage, effectively driving the company's performance growth.

With the establishment of a joint venture with the Ninth Nuclear Academy, laser confrontation is expected to create a new growth pole. Under the influence of the rapid development of UAV, the demand for high-precision and low-cost air defense systems is being released rapidly, and the research and application of laser weapon systems are also promoted rapidly in various countries. Centering on the application demand of laser countermeasure, the company breaks through the key technologies such as laser space beam combination technology and laser stray light suppression technology, and realizes the first breakthrough in the domestic dynamic tracking and pointing test, and the technical level is in the forefront of the country. During the reporting period, the company also cooperated with the R & D and demonstration work such as high-precision tracking and pointing, system modular design and so on according to the needs of customers and the overall unit, and achieved good results. On June 9, 2021, the company jointly established "Sichuan Zhongjiu Xinguang Technology Co., Ltd." with a subsidiary of the Chinese Academy of Engineering Physics, in which Xinguang Optoelectronics owns 51% of the shares. It has become a milestone for the company to work with the leading platform in the field of laser countermeasure in China to focus on the layout of the laser countermeasure system. In 2020, the company's laser weapons product revenue reached 9.0886 million (+ 1107%), the product has been initially released, and is expected to become a new growth pole of the company's performance in the future.

Risk factors: the risk that production capacity expansion is not up to expectations and the progress of multi-service promotion is uncertain.

Investment advice: the pressure on performance in 2021 is fully released, and the high increase in 2021H1 performance also reflects that the company has returned to the right track. It is expected that in the second half of the year, the breakthrough application of infrared guidance in hypersonic missiles and the technological transformation and upgrading of heavyweight models will gradually fall to the ground, and the company is expected to usher in the year of achievement in 2020. At the same time, the company set up a joint venture with the Ninth Nuclear Academy to jointly focus on the layout of the laser countermeasure system. At present, laser products have been initially released, and it is expected to create a new growth pole for the company's performance in the future. The EPS of the maintenance company in 2021-23 is predicted to be 0.98,1.56,2.00 yuan. In view of the fact that the company's performance in 2021 is expected to achieve higher-than-expected growth, and the company officially opened its business to recognize revenue in 2021, it will maintain the target price of 93.24 yuan, corresponding to 95 times PE valuation in 2021, and maintain "buy".

Rating.