\u3000\u3000 Chengdu Rml Technology Co.Ltd(301050) (301050)
Event: the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company in 2021 will be 190-220 million yuan, with a year-on-year increase of 56.8% – 77.5%; It is expected to realize a net profit of 170-200 million yuan, a year-on-year increase of 46.4% – 71.5%.
The company’s performance increased significantly, and the growth rate of net profit attributable to the parent company exceeded 50%. The net profit attributable to the parent company in 2021 was 190-220 million yuan, an increase of 56.8% – 77.5% year-on-year, mainly due to the company’s reasonable plan to expand production capacity and the rapid growth of the number of orders delivered in 2021.
The industry barrier is high, and the market space of precision guidance equipment is large. The company’s industry has high requirements for product technical level, and the subdivision industry of the company’s main product active phased array micro system is still in the initial stage of development in China, with high technical complexity and high barriers to entry. As one of the few enterprises in China that can provide aerospace grade communication data link products, the company has great market competitiveness and certain technological leading advantages based on years of technology accumulation. At present, the company’s precision guidance products account for more than 90% of the company’s main business income. With the continuous improvement of China’s national defense expenditure, the main battle equipment is updated more and more frequently, and the demand for new weapons and equipment is increasing. The state’s requirements for military live fire training have been continuously improved, the consumption of military equipment has increased significantly, and the market space for precision guidance products is broad.
The main customers are scientific research institutes, general units and the military under the military industry group, with strong customer stickiness and high concentration. Due to the strong viscosity and high replacement cost of military products, the company has cooperated with the largest downstream customer since 2011. Benefiting from the finalization and batch production of M03 products in 2018, the unit sales of this customer increased rapidly. The sales in 2019 and 2020 were 250 million yuan and 270 million yuan respectively, accounting for 85.3% and 78% of the company’s revenue in the current period. The company maintains close cooperation with customers. In the future, with the finalization and batch production of main products, the customer structure will tend to be stable. The highly centralized business model of China’s military industry leads to high customer concentration in military enterprises. The total proportion of sales amount of the company’s top five customers in operating revenue in recent three years is 98.7%, 99.7% and 98.5% respectively. At present, the company is actively engaged in R & D, expanding new customers and new markets. It is expected that the customer concentration will decline in the future.
Profit forecast and investment suggestions. It is estimated that the EPS from 2021 to 2023 will be 2.15 yuan, 3.37 yuan and 4.77 yuan respectively, and the net profit attributable to the parent company will reach a compound growth rate of 56.16% in the next three years. Considering that the “14th five year plan” of the military industry will usher in a high-speed development stage, as a leading enterprise in the field of phased array radar, the company has significant advantages in core algorithms, rich project experience and high-quality customer resources. It is expected that the company’s order volume will usher in a significant growth, cover for the first time and give a “hold” rating.
Risk warning: the expansion of production line is less than expected, the risk of large customer orders and other risks.
