\u3000\u3000 Shanghai Huace Navigation Technology Ltd(300627) (300627)
China Spacesat Co.Ltd(600118) the navigation industry is booming, and the company’s profit is stable, covering many scenes. According to the data of China Spacesat Co.Ltd(600118) navigation and positioning Association, the scale of China’s high-precision equipment market in 2020 was 11.04 billion yuan, with a compound growth rate of 26% in the past decade. As China’s Beidou system becomes the fourth largest satellite navigation system in the world, China’s high-precision satellite navigation industry benefits from policy, technology and cost driving. It is expected to maintain a growth rate of 13% in the future (predicted by the reference organization), and is expected to reach 20 billion yuan in 2025. As an expert in high-precision navigation and positioning technology, the company has made steady profits. The CAGR of revenue / net profit attributable to parent company in the past five years is 31% / 30% respectively, and has formed the strategic layout of “one core, two platforms and three applications”.
Continuous R & D creates high barriers and actively extends to the upstream and downstream of the industry. 1) Product matrix: Based on the core high-precision positioning technology, the company continued to update the traditional RTK products, and expanded the business of downstream higher value solutions such as agricultural machinery navigation, displacement monitoring, mobile mapping, UAV and unmanned ship, vehicle positioning and navigation. The revenue of h12021 was 276 million yuan, a year-on-year increase of 158%. 2) R & D innovation: the company’s 21q3 R & D expenditure accounts for 18.1%, which is in the forefront of the industry. Actively extend to the upstream of the industrial chain, successfully developed GNSS baseband chip “Xuanji”, and laid out vehicle specification gnsssoc chip and IMU chip. In 21 years, the company raised 800 million yuan for the R & D and construction of Beidou project and intelligent space-time project, which is expected to be completed within 2 years. 3) Sales mode: pay equal attention to direct sales and distribution, layout the whole country and expand overseas.
The traditional RTK business is stable, and the market space of the new track is nearly 100 billion. At present, the penetration rate of automatic driving of agricultural machinery is low, the government’s geological disaster pre-warning project is vigorously bidding, and vehicle positioning and navigation has become the standard configuration of automatic driving. The total market space of several major scenarios is nearly 100 billion yuan in 2025. The company’s RTK products account for the first place in the foreign market in China. The agricultural machinery and displacement monitoring business is expected to maintain a growth rate of more than 50%. It has been designated as the designated supplier of automatic driving position units of Nezha automobile and lutes, and is expected to be mass produced by the end of 2022. The rapid growth of new business is expected to drive the growth of the company’s revenue by 30%. According to the latest performance forecast, the revenue growth rate in 2021 is about 36%, and the net profit attributable to the parent company is RMB 283 million-296 million, with a year-on-year increase of 43.70% – 50.30%.
Investment advice and valuation
It is estimated that the company’s revenue from 2021 to 2023 will be 1.923 billion yuan / 2.671 billion yuan / 3.79 billion yuan respectively, the net profit attributable to the parent company will be 284 million yuan / 376 million yuan / 520 million yuan respectively, and the corresponding EPS will be 0.75 yuan / 0.99 yuan / 1.37 yuan respectively. The company will be given 50 times PE in 2022, the target price will be 50 yuan / share, and the market value will be 20 billion yuan. The first coverage will be given a “buy” rating.
Risk
Beidou’s relevant subsidy policies risk of declining strength, new track technology update, industrial scheme subversion risk, chip research and development failure risk, RMB exchange loss risk, restricted shares lifting risk.
