\u3000\u3 China Vanke Co.Ltd(000002) 465 Guangzhou Haige Communications Group Incorporated Company(002465) )
Event: on March 26, the company disclosed the annual report of 2021. In 2021, the company’s revenue was 5.474 billion yuan (+ 6.87%), the net profit attributable to the parent was 654 million yuan (+ 11.61%), the net profit not attributable to the parent was 564 million yuan (+ 22.83%), the gross profit margin was 37.34% (+ 1.04pcts), and the net profit margin was 12.67% (+ 1.30pcts).
Key investment points:
Roe has reached a new high in recent five years, and various business sectors are expected to blossom in 2022
During the reporting period, the company’s operating revenue (5.474 billion yuan, + 6.87%) maintained a stable growth, mainly due to the company’s breakthroughs in core technology construction, technology development in innovation fields and market layout. The gross profit margin (37.34%, + 1.04 PCTs) increased, which is mainly related to the certain increase in the gross profit margin of the company’s Beidou navigation, software and information business. Under this circumstance, the company’s net profit attributable to the parent company (RMB 654 million, + 11.61%) increased steadily, and the net profit not attributable to the parent company (RMB 564 million, + 22.83%) increased rapidly. The net profit margin (12.67%, + 1.30pcts) and ROE (6.35%, + 0.45pcts) both reached a new high since 2017. We believe that it is also related to the decline of the company’s asset impairment loss (RMB 67 million, – 46.66%) in the current period, especially the significant decline of goodwill impairment loss (RMB 39 million, – 59.08%).
In terms of business, during the reporting period, the company’s four major businesses include wireless communication, Beidou navigation, aerospace, software and information services. The details are as follows:
① wireless communication business is still the largest source of revenue of the company. The revenue (2.666 billion yuan, + 16.71%) has continued the stable growth of about 15% in recent three years, and the gross profit margin (46.32%, – 1.87 PCTs) has decreased slightly, but it remains at a high level;
② Beidou navigation business revenue (425 million yuan, + 5.14%) increased, and the gross profit margin (66.44%, + 6.95 PCTs) increased significantly;
③ the revenue of aerospace business (RMB 267 million, – 14.03%) declined, and the gross profit margin of this business (45.52%, – 1.04 PCTs) was still in a high position;
④ software and information service business is also one of the main revenue sources of the company. The revenue (2.043 billion yuan, – 1.00%) is basically the same as that in 2019 and 2020, and remains at about 2 billion yuan. The gross profit margin of the business (17.17%, + 1.14 PCTs) and the net profit margin of sales (9.18%, + 1.52 PCTs) of related subsidiary Hagrid Yichuang have increased, but have not yet returned to the level of 2019 before the epidemic.
To sum up, it can be seen that during the reporting period, the revenue growth of the company’s wireless communication business and Beidou navigation business was the main driving force for the stable growth of the company’s overall performance, and from the beginning of 2021 to now. For the wireless communication business, Beidou navigation and supporting business disclosed by the company, the total contract scale involving 2022 (some contracts include 2021) reached 2.413 billion yuan. At the same time, the inventory of Beidou navigation business of the company in 2021 (311 million yuan, + 44.34%) increased significantly. Combined with the company’s disclosure of a number of Beidou 3 general terminals and equipment, the effective layout in the market of special institutions was realized, and the bidding was successfully shortlisted. We judge that, The company’s wireless communication business and Beidou navigation business have full orders. The scale of business revenue above 2022 may increase rapidly, becoming an important revenue and profit growth point of the company.
It is worth noting that the business contract disclosed by the company also includes intelligent unmanned system. Combined with the company’s disclosure, the company plans to invest in the construction of unmanned information industry base in Guangzhou, take the intelligence, informatization and anti unmanned system of unmanned system as the business core, and build a land, air and space coverage system integrating R & D, intelligent manufacturing, testing and simulation training Unmanned information industry bases in many fields such as water area and professional training bases with aviation flight training ability. We expect that unmanned system business may also become a new revenue point of the company in 2022.
In addition, Chida aircraft, a subsidiary of the company engaged in aircraft parts manufacturing business, has officially started to be dismantled and listed on the gem. Chida aircraft is a high-end aviation manufacturing industry and has mastered the manufacturing technology of large aircraft parts. In 2021, the revenue reached 128 million yuan (- 6.15%), and the net sales interest rate was 33.67% (+ 9.15pcts). At present, the listing guidance work is progressing steadily. We believe that the company is expected to make further use of the capital market to quickly improve the performance flexibility of aerospace business.
To sum up, we judge that in 2022, the company’s business segments are expected to blossom at many points, laying the foundation for the stable growth of the company’s revenue scale and performance.
Increased R & D investment, covering the company’s Beidou navigation, wireless communication and other businesses
In terms of expenses, during the reporting period, under the background of the stable growth of the company’s income, the company’s three fee expense rate (8.56%, + 0.16pcts) increased slightly. Among them, the company’s financial expenses (- 41 million yuan, a decrease of 36 million yuan compared with 2020) decreased significantly, which was mainly due to the year-on-year increase in interest income, decrease in borrowing and decrease in interest expenditure due to the company’s purchase of deposit products. The company’s R & D expense rate (14.59%, + 1.08 PCTs) increased significantly, mainly due to the impact of centralized bidding of the company’s R & D projects, while the scientific research projects are basically based on prototype comparison and measurement, and the prototype development investment is large. From the company’s disclosure, we believe that the company’s main R & D investment projects cover the new Beidou 3 navigation equipment and system, various wireless communications (short wave and ultra short wave), digital trunking communication The fields of satellite communications and unmanned systems will lay a good foundation for the company’s product bidding and batch production in the next few years, which will be conducive to the sustained growth of the company’s medium and long-term performance.
In terms of cash flow, the company’s net increase in cash and cash equivalents (528 million yuan, + 195.81%) increased significantly, mainly due to the significant increase in the net cash flow from investment activities (401 million yuan, an increase of 1.345 billion yuan compared with 2020) caused by the increase in the due amount of financial products and the decrease in the scale of financial investment; Meanwhile, the company’s net cash flow from operating activities (RMB 628 million, – 56.51%) decreased significantly, mainly due to the increase in payment for goods due to business growth, increased material preparation and other reasons.
In terms of other financial data, at the end of the reporting period, the company’s contract liabilities (829 million yuan, an increase of 82.95% over the beginning of the period) increased significantly. At the same time, the company disclosed that the amount of revenue corresponding to the performance obligations signed but not yet performed or not yet performed at the end of 2021 was 2.693 billion yuan, of which 2.565 billion yuan is expected to be recognized in 2022. We judge that the above all reflect that the company has sufficient orders on hand and will cash them into the company’s income statement in the future.
The company’s business spans multiple tracks of national defense informatization, aerospace and communication technology services, and actively expands the field of unmanned systems and communication
The company is a major member of Guangzhou Radio Group, a national innovative enterprise, an enterprise under the “double hundred action” of the state owned enterprise reform of the state owned assets supervision and Administration Commission of the State Council and one of the top 100 enterprises in electronic information in China. Its main business covers four major fields: wireless communication, Beidou navigation, aerospace, software and information services. It is an expert in the development of Beidou navigation equipment covering the whole frequency band and the layout of the whole industrial chain Electronic information system solution provider is one of the key electronic information enterprises with the widest user coverage, the widest frequency band coverage, the most complete product series and the most competitive in the industry. It is the leader of China’s institutional market simulation system and the industry-leading supplier of software and information services.
① wireless communication
In the field of wireless communication, the company’s leading products cover the fields of short wave communication, ultra short wave communication, satellite communication, digital cluster, multi-mode intelligent terminal and system integration. It is a traditional advantageous enterprise with full frequency band coverage and one of the units with the most complete types of wireless communication equipment.
During the reporting period, the company was among the best and successfully shortlisted in the bidding of many major projects related to the main ordering directions in the short, medium and long term. Among them: short wave service breaks through the field of airborne mainstream platform again; The new spectrum general-purpose communication equipment passed the state identification and broke through the field of general-purpose handheld ultrashort wave for the first time; Bidding for the next generation software radio communication equipment platform, becoming the unit with the most shortlisted projects of the platform; Winning the first ad hoc network waveform project and entering the field of wireless broadband communication; The research and development of new generation digital trunking products have been smoothly promoted; The multi type communication and guidance integrated equipment, which integrates various technical means such as satellite communication, Beidou and inertial navigation, has stable and reliable performance, and is gradually installed on a variety of vehicle platforms; A multi-mode intelligent terminal has been finalized and delivered in batch.
② Beidou navigation
In the field of Beidou navigation, the company takes the lead in realizing the whole industrial chain layout of “chip, module, antenna, terminal, system and operation”, and is a pioneer in the application of “Beidou + 5g”.
During the reporting period, a number of beidou-3 baseband / RF / anti-interference chips and components of the company successfully entered the list of qualified electronic components for institutional users. It is the unit with the most models and the most complete categories in the user field in the whole industry, laying a technological leading edge for the development of beidou-3 equipment; The anti-jamming satellite navigation antenna has improved relevant core technologies, expanded new application scenarios and reached the leading level in China, laying a solid foundation for the subsequent development of high-end equipment in the field of Beisan new platform; Beidou has launched the first short message module in the industry and achieved the global short message market at the same time.
In terms of terminal development, a variety of Beidou 3 general terminals and equipment have achieved effective layout in the market of special institutions, and the bidding has been successfully shortlisted, consolidating and expanding the company’s industry position in Beidou market, and constantly breaking through the field of new weapons platform, so as to lay a solid foundation for further expanding the market share. In terms of industrial application, we will focus on the transportation field, and actively promote the implementation of Beidou smart terminal projects in emergency, energy, agriculture and forestry.
In addition, during the reporting period, the company increased the capital of Huaxintai to enter the high-precision time-frequency field. At the same time, the company invested in the establishment of a wholly-owned subsidiary, Hagrid Jingwei, and gradually integrated the company’s existing market, technology, manufacturing, management and other resources in the Beidou navigation field to form a unified Beidou navigation business platform.
In the field of aerospace, the company is one of the leaders in the simulation system of China’s institutional market and the first in China to provide “level D” for institutional users
Simulator supplier, whose specific business mainly includes simulation, development of domestic civil aviation communication equipment and precision intelligent manufacturing of aircraft parts. In terms of simulation business, it covers flight simulator, maintenance simulator, vehicle simulator, electric motion platform, visual system and other products.
In terms of the development business of civil aviation communication and guidance equipment, it mainly provides domestic communication, navigation and monitoring products and system solutions for civil aviation. It is the manufacturer that has obtained the most licenses for the use of civil aviation communication, navigation and monitoring equipment in China.
In terms of aircraft parts manufacturing business, it mainly provides precision and intelligent manufacturing of aircraft structural parts, composite materials, aviation material standard parts, simulators and other products for aircraft manufacturers at home and abroad.
During the reporting period, the company officially launched the spin off of its subsidiary Chida aircraft to be listed on the gem. On the one hand, it is conducive to expand the financing channels of Chida aircraft, make full use of the capital market to become stronger, better and bigger, improve the profitability and comprehensive competitiveness of enterprises, and realize leapfrog development; On the other hand, the independent listing of Chida aircraft can more clearly and completely show its business operation and development to investors, help the capital market to conduct professional analysis on it and endow it with reasonable and objective market value.
At the same time, the company signed the strategic cooperation framework agreement on flight simulation training industry with Poly International Holdings Co., Ltd. to jointly develop national high-end equipment manufacturing and high-end services, realize the strategic layout and market expansion of both sides in the field of flight simulation, and build a professional training institution with aviation flight training capacity that is local and covers some overseas countries, Promote the improvement of the overall level of China’s flight simulation training industry and the process of equipment localization.
④ software and information services
The company is an information and communication technology service provider with competitive advantages. Haige Yichuang, a wholly-owned subsidiary of the company, is an information and communication technology service provider with competitive advantages in the industry, providing all-round integrated business support and it application system solutions, covering more than 20 provinces (autonomous regions and municipalities directly under the central government) in China; In recent years, we have actively distributed the market of special institutions, and have obtained class a qualification for classified information system integration.
During the reporting period, Hagrid Yichuang successively won the “China Mobile 20212023 network comprehensive maintenance service procurement project” and “China Mobile 20222023 communication engineering construction service centralized procurement (transmission pipeline and equipment installation) project”, with a total contract amount of nearly 3 billion yuan, which strongly supports the sustainable development of the business. Among them, the selected share of agency maintenance business in Sichuan, Inner Mongolia, Beijing, Tianjin, Henan and Shandong has further increased compared with the previous round of procurement projects, and has newly entered the markets of Hubei and Heilongjiang provinces, with a large increase in the market area of engineering business.
⑤ other fields (unmanned system, unmanned communication and intelligent core components)
In other fields, the company mainly focuses on the military application direction of AI technology related to the important trend of ordering for special institutions in the future, specifically involving unmanned systems, unmanned communication and intelligent core components.
In terms of unmanned system, the first unmanned system scientific research project contract has been signed; All subjects participated in the “crossing obstacles 2021” land unmanned system challenge entered the top five; Won the second place in the air force “unmanned front” intelligent UAV cluster system challenge; Participate in the armed police “Zhiwei Cup” unmanned system challenge and obtain the qualification to participate in the subsequent bidding of unmanned projects.
In terms of unmanned communication, it has united with a number of advantageous units to obtain excellent results in all the entries of the land unmanned system challenge.
In terms of intelligent core components, an automatic identification and tracking technology was shortlisted for the user pre research project of an institution.
At the same time, the company plans to invest in the construction of Haige unmanned information industry base project in Zengcheng District, Guangzhou. Relying on the company’s advanced layout and first mover advantages in the field of unmanned systems, the company takes the intelligence, informatization and anti unmanned systems of unmanned systems as the business core and “high-tech R & D, high-end manufacturing and high-end service” as the layout to build a project integrating R & D, intelligent manufacturing, testing A multi domain unmanned information industry base integrating simulation training and a professional training base with aviation flight training capability. At present, it has invested in the establishment of a wholly-owned subsidiary, Haige tianteng.
The company is located in many high boom development tracks, and the performance flexibility and profit space are expected to be further improved during the 14th Five Year Plan period
On the whole, the company’s current four business areas of “wireless communication, Beidou navigation, aerospace, software and information services” are mainly in the fields of national defense informatization (military communication, satellite navigation application), aviation industry and communication technology services. Our views on the relevant demand side and supply side are as follows:
On the demand side, we believe that the height of the development trend of national defense informatization, the replacement of terminal equipment related to beidou-3 satellite system, terminal modules and other weapons
