\u3000\u3 Guocheng Mining Co.Ltd(000688) 682 Shanghai Hollywave Electronic System Co.Ltd(688682) )
The company is a leading manufacturer of electromagnetic simulation and phased array calibration and test systems. The company was founded in 2007. The founding team comes from the subordinate units of the national defense science and industry group and the international leading electromagnetic simulation software enterprise. Starting from the simulation and design service technology, the company has experienced the breakthrough of the core technology of phased array test and the in-depth development of phased array technology, and formed four business structures: phased array calibration and test system, phased array related products, electromagnetic field simulation analysis and verification business and general test service. In 2021, the company achieved a revenue of 330 million yuan, a year-on-year increase of 43.78%; The net profit attributable to the parent company was 61 million yuan, with a year-on-year increase of 35.30%, maintaining a rapid growth as a whole. The company has excellent team background, with master's degree or above accounting for more than 60%, and equity incentive also gives a minimum compound growth target of more than 25%.
The application of phased array radar is deepened, and the demand for test system is expected to accelerate. According to the latest budget data, China's military budget in 2022 was 1.45 trillion yuan, a year-on-year increase of 7.1%, and the growth rate returned to more than 7% again. In the field of military informatization, it is expected to increase investment in the modernization and upgrading of weapons and equipment such as phased array radar. The demand of the company's phased array calibration and test system is directly related to the model of phased array radar and indirectly related to the products of phased array radar. With the deepening of the application of phased array technology in military industry during the 14th Five Year Plan period and the company's acquisition of 51% equity of Hongjie electronics, the two sides have significant synergy in products, technology, customers and other fields, and the phased array calibration and test system is expected to maintain high growth.
Phased array related products are expected to gradually increase in volume during the 14th Five Year Plan period. At present, phased array radar is continuously replacing the traditional mechanical radar. Phased array radar and antenna have been applied to aircraft, ships and weapons. They are indispensable strategic products in the military field. Among them, phased array is the core part of radar, accounting for half of the cost of the whole system, while t / R is the core part of active phased array system, and the company's participating components have high value. Relying on the simulation and testing technology accumulated for many years, the company's business extends to the phased array products themselves. The revenue of relevant prototypes has gradually increased in recent years, and is expected to be further increased in the future.
Release new CAE products, which are expected to continue to grow under the background of localization. CAE has extremely high technical barriers and is the crystallization of many basic sciences such as mathematics, engineering and physics. Foreign giants have entered the stage of M & a development, and China's autonomy is very low. Based on the self-developed core and the engineering experience accumulated in the field of electromagnetic field simulation for more than ten years, the company officially released the three-dimensional electromagnetic simulation software rdsim1 for the first time Version 0. The company's team has strong technical background and is expected to make continuous breakthroughs in the field of electromagnetic simulation.
Profit forecast and Valuation: the company is currently in a period of rapid growth. It is estimated that the revenue from 2021 to 2023 will be RMB 330 / 456 / 617 million, and the net profit attributable to the parent company will be RMB 61 / 0.85/115 million (+ 36% / 39% / 36%), corresponding to 59 / 42 / 31 times of the current share price PE. Through multi angle valuation, it is between 123.66-130.45 yuan, which has 27% - 34% valuation space relative to the current stock price of the company. For the first time, give a "buy" rating.
Risk warning: the epidemic situation repeatedly affects the normal operation rhythm; The competition of phased array testing industry intensifies, and the promotion of related products is less than expected; The breakthrough progress of CAE and other products is slow; Trade frictions continued to escalate.
