Introduction to this report:
Maintain profit forecasts, maintain target prices and increase holdings ratings; performance is in line with expectations, and loss reduction effects are remarkable; industrial plans are frequent, and the prospects for the satellite communications business are optimistic.
Key points of investment:
Maintain profit forecasts, maintain target prices, and maintain an increase in holdings rating. The company released its 2023 annual performance report. Net profit to mother was -370 million yuan, in line with previous expectations. For this reason, we maintained net profit attributable to the parent company in 2023-2025 at -3.67/0.48/500 million yuan, corresponding EPS of -0.11/0.01/0.15 yuan. Maintain the target price of $10.82 and maintain the increase in holdings rating.
The performance was in line with expectations, and the loss reduction effect was remarkable. The company released the 2023 Express Report, achieving net profit of 370 million yuan to mother, compared with an estimated loss reduction of 303 million yuan over the same period. We believe that the company's profitability continues to improve, mainly benefiting from the company's increased market development. In the domestic operator market, the company's wireless main equipment and base station antenna business has maintained steady growth, and market competitiveness continues to improve.
Industrial plans are frequent, and I am optimistic about the future of the satellite communication business. Recently, there have been many industrial planning policies related to satellites. On January 26, 2024, Beijing released the “Beijing Action Plan to Accelerate Commercial Aerospace Innovation and Development (2024-2028)”, which includes the operation of giant constellation networks; on January 29, seven departments including the Ministry of Industry and Information Technology issued “Implementation Opinions on Promoting Future Industrial Innovation and Development”, referring to keywords such as satellite Internet; on February 2, Shandong issued the “Shandong Aerospace Industry Development Plan”, focusing on various industry directions such as launch vehicles and satellite manufacturing and applications. It will build Jinan Aerospace Information, Qingdao General Aviation and Satellite Communications, and Yantai Commercial Aerospace Industrial core agglomeration area. We believe that satellite communication is an important development direction for the country. The company has excellent capabilities in low-orbit satellite communication technology and is expected to take the lead in development.
Catalysts: The share of main equipment continues to rise, domestic low-orbit satellite industry chain policy? Risk warning: The development of the satellite industry falls short of expectations, and the share of main equipment falls short of expectations.