The company issued a notice stating that it plans to use its own capital to establish a metamaterial research and development center, carry out theoretical and applied research on metamaterials, and will invest in scientific research projects in stages according to the progress of research and development projects to carry out exploration of the industrialization of metamaterials. Main opinion 1. The company's forward-looking layout of the metamaterials field is expected to further improve the core competitiveness of the military industry business. Metamaterials refer to artificial composite structures or composite materials with extraordinary physical properties not found in natural materials. They are one of the most advanced technologies in the military industry segment. Currently, it is still in the theoretical research and laboratory sample development stage, and is expected to be widely used in the fields of high-performance devices and stealth technology in the future. The company plans to explore metamaterials research and industrialization in advance by establishing an R&D center. The project is expected to help the company further build the core competitiveness of the military products business and open up new performance growth points for the company through leading R&D platforms. 2. The company is a high-quality target for civilian participation in the military. Its main military products are highly profitable, and the market space is broad. The company is a leading supplier of terminal air defense command and control systems in China, and has a technology-leading independent R&D platform. The main products of the company's military business include man-portable anti-aircraft missile command systems and regional anti-aircraft missile command systems. In addition to supplying the domestic military, the products are also sold to overseas markets through military trade companies. In 2014, the company achieved a total operating income of 223 million yuan and a comprehensive gross profit ratio of 47.68%. According to rough statistics, the current global demand for man-portable anti-aircraft missile command systems is around 83 million sets. In the future, as the number of anti-aircraft missiles increases, the market demand for the terminal air defense command and control system, the company's main product, is expected to further increase. 3. The company's development of the civilian goods market has begun to bear fruit, and the performance of the two-wheel drive company has increased its ability to withstand risks. In May 2015, the company announced the acquisition of 60% of Shenzhen Huayang Communications's shares. Huayang Communications is mainly engaged in R&D and sales of microelectronic components, microwave radio frequency modules and electronic products. In 2014, it achieved sales revenue of 93 million yuan and net profit of 100 million yuan. After the acquisition is completed, the company is expected to use the Huayang Communications platform to open up the civilian communication products market. Furthermore, the company uses its accumulation in the field of air defense products to actively promote the application of technology in civilian fields such as general aviation, critical perimeter security, and marine exploration. In 2015, the company's “General Aviation Integrated Support System” has passed the technical inspection organized by the Civil Aviation Administration of China, and a cooperation framework has been signed with interested organizations; in addition, the company's prototype in the field of marine environment exploration has also entered the optimization testing stage. The development of the company's civilian products market is expected to mitigate performance fluctuations brought about by the military products business, increase the company's performance, and enhance the company's ability to withstand risks. 4. Profit forecast The company's EPS for 2015-2017 is 1.05 yuan, 1.26 yuan, and 1.46 yuan respectively. The corresponding PE is 212X, 177X, and 152X respectively. It is recommended to pay attention (no ratings yet). Risk warning: Metamaterials development is too late