Haige Communication (002465) 2019 Interim Report Review-Steady Growth in Performance and Prospects for Military and Civil Business

Haige Communication (002465) 2019 Interim Report Review-Steady Growth in Performance and Prospects for Military and Civil Business

The company achieved EPS 0 in the first half of 2019.

10 yuan, the reported company’s revenue growth is steady, the gross profit margin is basically stable, the expense ratio has improved, the asset disposal income has dropped, and the non-net profit deduction has grown faster.

Considering that the market competition that the company faces may intensify and the Beidou business growth exceeds our expectations, we lower the company’s EPS forecast for 2019/20/21 to 0.

24/0.

31/0.

39 yuan.

Considering the company’s market level in 深圳桑拿网 the wireless communications, satellite communications, and navigation fields, we maintain a “Buy” rating with a target price of 11 yuan.

Revenue grew steadily, and non-net profit deducted grew faster.

The company achieved revenue 19 in the first half of 2019.

7.6 billion (+8.

14%), net profit attributable to mother 2.

2.3 billion (+18.

98%), achieving EPS 0.

10 yuan, net profit after deduction is 1

4.1 billion (+61.

47%).

The reporting company continued to enrich its product lines and strengthen customer development, with overall revenue growing steadily and gross profit margins of 35.

83%, basically maintained stable, sales, management (including research and development), improved financial expense ratio, asset disposal income increased by 32.63 million yuan to 5.03 million yuan.

In the future, the gradual recovery of military orders and the expansion of the civilian market will result in the company’s performance growth.

Wireless communication business: Expansion of the incremental market with good orders.

2019H1 company’s wireless communication business achieved revenue6.

90,000 yuan, an increase of 12 in ten years.

6%, gross profit margin increased by 4.

84%.

While consolidating the short-wave, ultra-short-wave, and second-generation satellite stock businesses, the company is actively expanding the multi-mode intelligent terminals, digital accumulation, satellite terminals, and satellite communications and other incremental markets.

At present, the company announced the annual wireless communication in 2019, and the amount of Beidou navigation related orders has increased by more than 700 million.

With the further recovery of military orders and the company’s continued development of customers in the Air Force, Armed Police, and War Support, the future order situation is expected to continue to improve.

Beidou navigation business: The Beidou III chip achieves a breakthrough, and the downstream application prospect is broad.

2019H1 company Beidou navigation business revenue1.

4 ‰, a year increase of 1%, and gross profit margin decreased by 1.

6.

This year, the company released the “Dolphin No. 1” baseband chip for the first time, and the Beidou No. 3 RX37 series of radio frequency chips. Among them, the radio frequency chip ranked first in the customer’s first round of physical comparison test.

The company’s continuous development of downstream industry application solutions, civilians have steadily advanced demonstration projects in areas such as location services, smart cities, and intelligent transportation; in the military sector, the increase in procurement of information equipment and the upgrading of second-generation positioning terminals are committed to bringing the marketIncrement.

Aerospace business: The military-civilian market keeps going, and new growth points are gradually formed.

2019H1 Aerospace Business Revenue 0.

66 ppm, a ten-year increase of 7.

4%, gross margin increased by 3.

4.The traditional simulation and simulation product line has been steadily advancing. Capricorn Innovation, a subsidiary, has signed a contract with Xifei and institutional customers to formulate simulators, and actively expand the civilian market.

The aircraft parts manufacturing business gradually moved to the international market, and Chida Aircraft passed the supplier qualification review of Airbus.

The aerospace business is expected to gradually form a new growth point.

Software and information services: The company has won multiple bids and has a good momentum of development.

2019H1 software and information services revenue10.

7 ppm, a six-year increase of 6.

3%, gross margin blood pressure 3.

6.

In the first half of the year, the subsidiary Haige Yichuang won a bid of more than 1.5 billion U.S. dollars. Among them, in the China Mobile Network Integrated Generation Maintenance and Collection Project, it won the bids for the relevant businesses in nine provinces and entered Henan and Shandong provinces for the first time.

The company’s future communication service business is expected to continue to expand overseas and military markets, and to deploy 5G network optimization and big data areas.

Risk factors: Beidou navigation business development exceeds expectations; market competition environment deteriorates; state-owned enterprise reform progress is gradually expected.

Investment suggestion: Considering that the company’s market competition may increase and the Beidou business growth is lower than our expectations, we lower the company’s EPS forecast for 2019/20/21 to 0.

24/0.

31/0.

39 yuan (the original forecast was 0.

27/0.

35/0.

43 yuan).

The current price is 8.

9 yuan, corresponding to 2019/20/21 PE is 37/29/23 times.

Considering the company’s market size in the wireless communications, satellite communications, and navigation fields, we maintain a “Buy” rating with a target price of 11 yuan (corresponding to 45 times PE estimates in 2019).