The impact of the epidemic continued in the first half of the year, and the performance continued to be under pressure. Satellite navigation demand continues to boom, the company's production capacity expansion superimposed R & D investment, the future can be expected; strategic development of electronic countermeasures, is expected to open up new growth space.

The impact of the epidemic continued in the first half of the year, and the performance and profitability continued to be under pressure. in the first three quarters, the income of 233 million yuan decreased by 0.65% compared with the same period last year; the net profit of 10 million yuan decreased by 80.67% compared with the same period last year; and the net profit of 2 million yuan decreased by 94.96% compared with the same period last year. 22Q3's single-quarter income of 104 million yuan increased by 59.52% over the same period last year, mainly due to the delayed delivery and acceptance of products in the first half of the year. The net profit of 200000 yuan decreased by 104.78% compared with the same period last year, and the net profit of non-return decreased by 295.74% in 2 million compared with the same period last year.

In the first three quarters, the company's comprehensive gross profit margin was 53.33%, down 6.96pct from the same period last year, mainly due to the increase in the localization rate of products and the rise in the price of some materials, resulting in a decline in gross profit margin compared with the same period last year. From January to September, the rates of R & D, sales and management expenses increased by 23.78%, 8.31% and 26.03% respectively compared with the same period last year, respectively. During the period, the expenses increased, mainly due to the provision of equity incentives in the first half of the year, the conversion of projects under construction to fixed assets and depreciation amortization.

The prosperity of missile-borne satellite guidance is high, and R & D investment continues to increase rapidly in the future. During the 14th five-year Plan period, national defense expenditure is focused on the direction of informationization and intelligence, and the company's satellite navigation products are mainly oriented to the missile and other weapons and equipment market. the industry demand has strong certainty and high prosperity.

Supply side: the company is one of the few domestic manufacturers that independently master the core technologies of navigation antenna, microwave frequency conversion, signal and information processing, etc., with national production design capability and is expected to fully benefit.

R & D investment: the company continues to invest in R & D, product technical characteristics continue to improve. In the first three quarters, the company's R & D expenditure of 55.39 million yuan increased by 11.9% compared with the same period last year, and high R & D investment supported future development.

With the strategic development of electronic countermeasures, the new growth space in the future is expected to open up. Electronic countermeasures has become one of the keys to modern information warfare. In recent years, domestic and foreign countries are gradually paying more attention to the deployment of electronic countermeasures equipment. The global electronic countermeasures industry is stepping into a new round of "creative demand."

In 2021, the company established the Electronic Countermeasures Division, taking electronic countermeasures as the strategic development direction. this year, the China News disclosed that the company has won the development orders of a number of electronic countermeasures equipment models by means of open bidding and competition. and will gradually achieve product stereotyping and mass production, at the same time, the company will participate in a number of project demonstration, research, to further enhance the company's electronic countermeasures related technology market competitiveness.

Investment suggestion

Although the impact of the epidemic in the first half of the year, the company's performance is under short-term pressure, but the demand of the health guidance industry remains optimistic, as the impact of the epidemic is eliminated, the company is expected to accelerate order delivery.

Maintaining the profit forecast of 1.8,2.8,380 million yuan in 2022-24, the PE is 56,36,27 times.

The company's industry chain status is scarce, with core technology and customer advantages, "buy" rating.

Risk hint

The intensification of competition leads to lower gross profit margin, lower customer expansion and order acquisition than expected, and the impact of the epidemic exceeds expectations.