Investment incident: The company announcement stated that the military procurement network has lifted the company's suspension, and the company's eligibility to participate in military procurement activities will be restored starting November 18, 2023.
Military procurement qualifications have been restored, and business in the special sector is expected to resume high growth. According to information from the military procurement network, the company has been lifted from the suspension, and starting November 18, 2023, the company's eligibility to participate in military procurement activities will be reinstated. The special field business is one of the company's important business lines. Relying on advantages such as satellite data resources, technology, and industry experience, the company has maintained rapid growth in the special field in recent years. Currently, the company's military procurement qualifications have returned to normal, and the special sector business is expected to resume high growth.
The trillion-dollar treasury bond project is expected to drive high growth in the company's related business. Recently, the State Council approved trillion-dollar treasury bonds, focusing on eight major areas, including backbone flood control and treatment projects, natural disaster response capacity enhancement projects, irrigation area construction and renovation, and key soil erosion control projects. However, fields such as water conservancy and emergency response are the company's strengths, and application systems such as flash flood disaster monitoring and early warning platforms and intelligent management systems for the entire life cycle of water conservancy projects are highly recognized by the market. Relying on competitive advantages such as high-quality product solutions and a perfect national sales network, the company is expected to fully enjoy market dividends. With the implementation of the trillion-dollar treasury bond project, the company's water conservancy and emergency services are expected to usher in a period of accelerated development.
The active promotion of international business and satellite data business is expected to open up new space for the company's development. In terms of international business, the company insists on developing overseas markets. In July of this year, the company successfully won the bid for the “Bolivia National Integrated Radio Spectrum System - La Paz Electromagnetic Spectrum Acquisition and Monitoring System” project. The project amount reached US$22.387 million. In terms of satellite data services, on March 30 this year, the “Hongtu-1” distributed interference SAR high-resolution remote sensing satellite constellation was successfully launched. Currently, “Hongtu-1” is in good orbit, and the satellite data service is expected to accelerate. The international business space is vast, the demand for satellite data is increasing, and new businesses are being actively promoted, which is expected to open up new space for the company's development.
Investment suggestions: We expect the company's revenue in 2023/2024/2025 to be 30.89/40.30/5.272 billion yuan respectively, net profit of 320/4.49/651 billion yuan, corresponding PE of 40.5/28.8/19.9 times, respectively. Consider the integrated layout of the company's industrial chain to enhance competitiveness, maintain high business growth, and give the company a “buy” rating.
Risk warning: business development falls short of expectations, policy implementation is slow