Wuhan Guide Infrared Co.Ltd(002414) (002414)
event:
On December 3, 2021, the company announced the announcement on receiving the letter of acceptance of a certain type of bidding project. The bid winning unit and product are Wuhan Guide Infrared Co.Ltd(002414) certain model products; As part of the information in the letter of acceptance is sensitive, the company is exempted from disclosing the specific information of the sales object in accordance with the relevant provisions on external information disclosure. Impact of the winning project on the company: the company has actively participated in the bidding projects of various arms and models with excellent bidding results by virtue of its leading technology in the infrared industry and the localization and mass production of various categories of infrared core devices for many years. According to the requirements of the detailed rules for competitive bidding and selection of a certain type of project, the company won with the excellent result of scoring the first in the comparison of the development scheme, technical index satisfaction and scientific research and production capacity of this type of product. The winning model product is the core supporting product of a complete equipment system. According to the batch production characteristics of the model product, the key model product will have a positive impact on the performance growth of the company in the coming years.
On October 28, 2021, the company announced that in the third quarterly report of 2021, the operating revenue of the company in the first three quarters of 2021 was 2.445 billion yuan, a year-on-year increase of 26.26%; The net profit attributable to the parent company was 919 million yuan, a year-on-year increase of 15.49%; The net profit deducted from non parent company was 899 million yuan, with a year-on-year increase of 14.26%.
The company’s operating revenue in 2021q3 was 597 million yuan, with a quarter on quarter decrease of 49.83% and a quarter on quarter decrease of 21.39%; The net profit attributable to the parent company was RMB 225 million, with a quarter on quarter decrease of 50.67% and a year-on-year decrease of 19.06%; The net profit deducted from non parent company was 210 million yuan, with a quarter on quarter decrease of 53.94% and a year-on-year decrease of 22.52%.
The gross profit margin of the company in the first three quarters of 2021 was 57.53%, a year-on-year decrease of 11.38pcts; The net interest rate was 37.62%, a year-on-year decrease of 3.49 PCTs. The gross profit margin of the company in 2021q3 was 57.7%, with a quarter on quarter decrease of 0.05pcts and a quarter on quarter decrease of 5.41pcts; The net interest rate was 37.7%, a quarter on quarter decrease of 0.60pcts and a quarter on quarter increase of 1.14pcts.
Comments: Wuhan Guide Infrared Co.Ltd(002414) is a leading manufacturer in China’s infrared imaging industry. The company’s business areas cover four business segments: (1) infrared focal plane detector chip, (2) infrared thermal imaging machine and integrated photoelectric system, (3) new complete WQ system and (4) traditional non lethal ammunition and information ammunition.
Wuhan Guide Infrared Co.Ltd(002414) is the leader of China’s infrared semiconductor industry. The infrared detector is assembled by CMOS readout circuit and MEMS sensor, which belongs to semiconductor technology. Among the three core technologies of infrared detectors: (1) in the field of uncooled detectors, Gaode and RuiChuang are leading in China; (2) in the field of high-end HgCdTe refrigeration detectors, Gaode is the only private enterprise in China that can produce in mass; (3) As the most high-end class II superlattice detector, Gaode is the only Chinese enterprise capable of mass production. Through independent and controllable IDM mode, Gaode has three 8-inch production lines with three core technologies.
Government equipment business of Wuhan Guide Infrared Co.Ltd(002414) : the demand for DD guidance and individual soldiers has increased greatly, and the WQ system has opened up a broad space. The 14th five year plan is a high boom period for military industry. DD, as a consumable equipment, is the key procurement direction of WQ equipment in the 14th five year plan. In the short term, the rapid increase in demand for DD guidance, individual night vision and photoelectric pod is expected to drive Gaode’s rapid growth; In the long run, Gaode recently announced that it has obtained the scientific research and production qualification of a certain type of complete equipment system. Therefore, Gaode has the batch production capacity of the whole industry chain from the bottom core devices to the complete equipment system, and truly realizes the leap from the supporting unit to the overall unit.
The company continues to make every effort to ensure the high-quality delivery of the model product tasks signed in the early stage, and the company’s model project revenue continues to grow rapidly, becoming the main growth part of the revenue and profit in the half year of 2021. On the other hand, continue to carry out scientific research and innovation, further expand the application and promotion of infrared technology in multi product type number project products, win a key project with the first place in the overall field of complete equipment system, and win the second overall project of complete equipment system in China for the company, which will contribute new revenue and profit growth to the company.
In the field of export, the company has completed the export project approval of several types of system products, formed a strategic cooperative relationship with companies with relevant export rights, and achieved batch order in the overall export of complete equipment system, expanding the influence of the company in other customers. In the follow-up, the company will continue to actively promote the foreign trade, scientific research and export of model system products in close combination with the international market demand.
Handan Electromechanical, a wholly-owned subsidiary of the company, continued to focus on the production line, continuously strengthened the construction of R & D team, and fully guaranteed the development of bidding projects while completing the R & D tasks of existing model projects as planned; Through the implementation of automation transformation and rapid promotion of phase II construction of the new initiating explosive work zone, the company’s production and manufacturing capacity and service support capacity are continuously improved.
Civil products business of Wuhan Guide Infrared Co.Ltd(002414) : multi track layout and broad space for a long time. Benefiting from the substantial reduction of costs, there is broad downstream demand for hunting, quarantine, outdoor, monitoring and border defense in the infrared civil market. Gaode creates the uncooled infrared chip IDM mode and has the first wafer level packaging production line in China.
With the mass production of wafer level packaged detector chips, the company opens infrared core design and application solutions to the whole industry through the infrared “core” platform, promoting the rapid development of many emerging infrared application fields at home and abroad. The realization of miniaturization, low cost, high reliability and mass production of infrared core chips has inspired the infrared industry to gradually develop towards diversification, popularization and consumer goods. Taking the opportunity of the cooperation between temperature measurement and epidemic prevention products and multi industry fields, Zhigan technology, a subsidiary of the company, not only realizes the steady development of traditional industry business, but also vigorously promotes infrared thermal imaging technology to many innovative industries such as artificial intelligence, Internet of things, 5g, smart city, intelligent hardware and consumer electronics, breaking through the limitation of traditional market scale of infrared thermal imaging, Gradually realize leapfrog development in other emerging application fields, expand the application of infrared technology to all walks of life, and truly make infrared technology benefit the public.
1. In the outdoor night vision industry, after years of market-oriented operation, Zhigan technology has established a perfect channel network system in the world and realized standardized and efficient operation. The company continued to increase its support for China’s outdoor night vision dealers, helped the rapid recovery of China’s outdoor night vision market, launched cross-border e-commerce business, carried out extensive online promotion, and focused on developing new customer resources in Europe, North America, Australia and South America. The outdoor night vision field achieved steady growth in 2021.
2. In the traditional market, with the orderly recovery of China’s industrial manufacturing and economic order under the normalization of epidemic prevention, the demand for infrared temperature measurement in the industrial field has increased steadily. In the instrument and meter industry, the company has increased its policy support and promotion to Chinese temperature measurement dealers, vigorously developed the multi regional and multi field distribution cooperation model, explored new market resources, and doubled its business in the instrument and meter field in China in the first half of 2021; Continue to strengthen the promotion of global networks and cross-border e-commerce networks, and gradually obtain new overseas dealer resources on the basis of consolidating and deepening the cooperative relationship with the original core dealers. In the power detection industry, the company continued to invest heavily, actively responded to the development needs of the power industry, and continuously developed and upgraded new products to cope with the continuous upgrading of the demand of the power market. In the first half of 2021, the company’s power industry business achieved large-scale growth.
3. In emerging markets, relying on the core technical advantages of the perfect wafer level module product line, the company applies low-cost infrared thermal imaging modules to emerging application fields such as instruments and meters, epidemic prevention and health, security monitoring, smart home, Internet of things, intelligent hardware and so on. At present, the company has gradually built a second-generation 120 * 90 / 256 * 192 multi-resolution and multi field angle infrared wafer mold group product line. Relying on the extreme cost performance, high reliability and easy integration advantages of infrared thermal imaging module, it has been gradually applied to all kinds of intelligent hardware and terminal products.
4. In the field of traffic night vision products, the subsidiary Xuanyuan Zhijia focuses on the field of intelligent and safe driving, and is committed to the development of millimeter wave radar products, children’s forgetting detection system, the optimization and market development of far-infrared product line, so as to create a comprehensive vehicle safety solution. With the maturity of infrared detector wafer packaging technology, the cost of a new generation of infrared thermal imaging obstacle avoidance system has decreased significantly compared with that before. At present, Xuanyuan Zhijia has established a cooperative relationship with Shaanxi Automobile heavy truck, completed the product test and certification, and is about to supply in batch. The child forgetting detection system independently developed by Xuanyuan Zhijia uses ultrasonic technology to detect and alarm forgotten children in the car. It has reached cooperation with Chinese automobile brands and realized mass production and supply. In the field of automatic driving, Xuanyuan Zhijia has carried out product testing with a number of automatic driving enterprises and professional algorithm companies at home and abroad, and plans to add infrared sensors to the automatic driving scheme. In terms of market development, the company actively contacts with many brand automobile enterprises. In the future, the company will form alliances with more manufacturers, integrate available resources, expand the application of the company’s product line in automobiles, and build the company into a high-tech enterprise providing all-round vehicle safety solutions.
Profit forecast, valuation and rating: due to the impact of the epidemic, We lowered Wuhan Guide Infrared Co.Ltd(002414) the forecast of net profit attributable to parent company from 2021 to 2022 to RMB 1.258 billion (down 14.71%) and 1.543 billion (down 24.33%) respectively, increased the forecast of net profit attributable to parent company in 2023 to RMB 1.863 billion, and the PE corresponding to the current market value is 44x, 36x and 30x respectively. As an infrared leader, Gaode is expected to continue to grow in the future, and its valuation is lower than the industry average, maintaining the “buy” rating.
Risk tips: technology and product R & D risks; Risk of military expenditure reduction; Trade environment impact.
