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Zhongyuan Securities Tang Yue
The market of communication products expanded well in the first half of the year, and digital trunking business dragged down revenue growth. In the first half of 2012, the company realized sales revenue of 482 million yuan, a year-on-year increase of 7.8%, and net profit attributable to shareholders of listed companies of 100.3 million yuan, a year-on-year increase of 12.19%, slightly better than the first quarter.
In terms of business, the wireless communication product market expanded well, achieving a growth of 32.31%. In 2011, the company's military product contracts reached 940 million yuan, a year-on-year increase of 32.02%. The company's military product contracts were mainly signed in the second half of the year, and orders were completed within one to one and a half years. As the main military product business, wireless communication products were mainly driven by these orders.
In the same period, Beidou navigation business achieved a sales revenue of 36.81 million yuan, up 36.43% year on year, and the civil sector is expected to bring 18 million to 20 million yuan to the company. The revenue of Guangzhou official vehicle project with a total amount of 16.59 million yuan announced by the company in 11 years was recognized in 2012, which led to the expansion of Beidou navigation products in the civil field.
At the same time, the company's digital trunking business income was only 1.49 million yuan, a sharp decrease from 72.52 million yuan in the same period of 2011. This is mainly because the 800M project of the Guangzhou Asian Games was completed, and the company invested manpower in the development of military digital cluster products.
Since 2011, the company has expanded its business and achieved full spectrum product coverage. As a leading enterprise in the military wireless communication field, the company began to expand its business after its listing in 2010. While maintaining its military advantages, the company strives to build a civilian platform based on Haihua Electronics and integrate existing civilian businesses. At the same time, the company has established four core businesses of traditional wireless communication, Beidou navigation, digital trunking and satellite communication, and cultivated profit growth points such as spectrum management, software evaluation, radar, antenna and chip.
In the context of national defense informatization, the growth of military products business in the second half of the year is worth looking forward to.
From a policy perspective, informatization has become the main thread that runs through the modernization of national defense and the military. Since the late 1990s, China has put forward the "three-step" strategy for national defense modernization. The first goal has been completed, and the second goal is to "basically realize mechanization and make significant progress in informatization construction" by 2020. Therefore, China is currently in the critical decade of large-scale upgrading of weapons and equipment. At the same time, the white paper "China's National Defense in 2010" issued by the State Council in March 2011 also proposed a leap forward development path based on mechanization and led by informatization.
Give the company a "overweight" rating. It is predicted that the EPS from 2012 to 2013 will be 0.81 yuan and 0.94 yuan respectively, and the corresponding P/E ratios will be 33.26 times and 28.55 times respectively based on the closing price of 26.89 yuan on the 17th day. Considering the growth impetus brought by national defense informatization and Beidou system construction, the company was rated as "overweight".
Risk tip: the pace of national defense informatization is slower than expected, the progress of Beidou networking or industrialization promotion is slow, and the progress of civil market development is too slow.
