\u3000\u3000 Chengdu Rml Technology Co.Ltd(301050) (301050)
Event: Recently, the company released 2021 annual performance forecast and 2.4 billion major contract announcement. It is estimated that the net profit attributable to the parent company in 2021 will be 190 million ~ 215 million, yoy + 56.83% ~ 77.47%; It is expected to realize non net profit deduction of 171 million ~ 200 million, yoy + 46.35% ~ 71.47%. Among them, the net profit attributable to the parent company was 175 million in the first three quarters of 2021. In the fourth quarter, the net profit attributable to the parent company is expected to be 15 million ~ 40 million, yoy-68.18% ~ 15.05%. In 2021, the company’s production capacity expanded steadily and made every effort to ensure order delivery. The growth of production and sales volume brought profit growth.
Focus on the main business, and the revenue of precision guidance business accounts for more than 90%. According to the announcement, a certain model of precision guidance products of the company will start large-scale assembly after finalization in 2019. The revenue of precision guidance business will account for 96.9% and 92.8% of the total revenue from 2019 to 2020 respectively. Millimeter wave active phased array precision guidance system is a new technology developed all over the world in recent 10 years. China’s new equipment is iterative, and the requirements for practical training are constantly improving. The demand traction makes this kind of products have a broad market space in the future.
The communication data link service can be expected in the future. Due to high barriers in the industry of dedicated communication data link, the company has a high market position and first mover advantage in the field of active phased array micro system of data communication link, and its revenue will maintain stable growth in the future. In addition, the technical barriers and customization of communication data link products are high, so the product price and gross profit margin are high. This part of business is expected to improve the company’s comprehensive gross profit margin and continuously optimize the company’s profitability in the future.
2.4 billion contracts to ensure sustainable growth. Recently, the company announced that it had signed two order contracts for a certain supporting product with customers, with the amount of 1.23 billion yuan and 1.18 billion yuan respectively. The contract agreed to start delivery in 2022. In addition to M03, R03 and other finalized batch products, the company previously signed product demand orders for X03 products with customers in 2020 and 2021, and began mass supply in the fourth quarter of 2020. Orders in special fields have the characteristics of stability and sustainability. We reasonably expect that X03 products will also be an important part of the company’s future revenue. The company announced that there are 11 projects in hand, involving precision guidance, radar detection and communication data link products, of which 9 projects are expected to be finalized between 2021 and 2025. Rich project reserves are an important guarantee for the continuous growth of the company’s future performance.
Investment suggestion: we expect the net profit attributable to the parent company from 2021 to 2023 to be 200 million yuan, 438 million yuan and 660 million yuan respectively. The current share price corresponds to PE of 96x / 44x / 29x from 2021 to 2023. The company focuses on the new development mode of “demand traction + technology drive”, and currently has a strong technical leading advantage. In combination with the orders announced by the company and the future technical development trend, we will cover it for the first time and give it a “recommended” rating.
Risk warning: product delivery is not as expected; The finalization progress is less than expected; Technology iteration risk.
