On April 22, Guangha Communication's 20cm large daily limit. The military sector rose across the board, with China Shipbuilding Emergency, Jie'an Hi-Tech, Guanxiang Technology, Gaoling Information, and Gaomeng New Materials all having a 20cm daily limit, and more than 10 shares such as 712, Zhongbing Red Arrow, Fiberhome Electronics, and Aerospace Changfeng, and many stocks such as Dawn Aviation, Tianhe Defense, and Andawell rose by more than 10%.
On the news, Wu Qian, spokesman for the Ministry of National Defense, said at a special press conference on the establishment of the information support force that the adjustment and formation of the information support force is a strategic measure to build a new type of structure and layout of the services and arms and improve the system of modern military forces with Chinese characteristics, and is of great and far-reaching significance for speeding up the modernization of national defense and the armed forces and effectively fulfilling the missions and tasks of the people's army in the new era.
The agency believes that after the rapid growth of the military industry from 2020 to 2022, the performance of subdivisions in 2023 will be significantly different, the structural differentiation will be intensified, and it is expected to usher in high-quality development in the future. With the continuous development of equipment technology, new technologies and new products are emerging one after another, and there may be more investment opportunities in new fields and new qualitative combat fields. In addition, as China increasingly moves towards the center of the world stage, arms trade exports are expected to become a new growth point for the military sector.
Introduction and main business of Guangha Communication
The main business of Guangha Communication Co., Ltd. is to provide command and dispatch communication solutions for national defense, electric power, rail transit, government departments and many other fields, and to produce and sell digital and multimedia dispatching and communication equipment that meets the specific business needs of customers. The company's products mainly include information exchange platforms, series of dispatching consoles (terminals), IP phones, recording equipment for data collection and storage, interface equipment and information management systems. The company's products use computer, network, communication and automation technologies, with the information exchange platform as the core to form a command and dispatch system, which carries out non-blocking, point-to-point, point-to-multi-point, multi-point to multi-point exchange of information of all participating units, and realizes the rapid upload and issuance of command and dispatch instructions and information for customers.
The concept of Guangha communication stocks
Military industry, Guangdong plate, communication equipment, institutional heavy positions, state-owned enterprise reform, GEM comprehensive, artificial intelligence, military-civilian integration.
What is the status of Guangha communication industry?
In terms of operating income, Guangha Communication is lower than the industry average, ranking 98th in the industry.
What is the basic situation of Guangha Communication's stock issuance?
The total share capital of Guangha Communication is 249 million shares, of which 248 million A shares are outstanding. As of April 22, the total market capitalization was 4,350.5 million yuan, the circulating market value was 4,327.1 million yuan, and the price-earnings ratio was 71.07. The number of shareholders is 19,500. The largest shareholder is Guangzhou Digital Technology Group Co., Ltd., with the top ten shareholders accounting for 69.15% of the shares.
What about the financial data of Guangha Communication stock?
According to the 2023 annual report, Guangha Communication's total revenue was 451 million yuan, and the net profit attributable to the parent company was 44 million yuan, with a year-on-year increase of 17.62% in total revenue and a year-on-year increase of 16.05% in attributable net profit.
As of December 31, 2023, by industry, the operating income of national defense was 229 million yuan, with a revenue ratio of 50.79%, and the operating income of electricity was 211 million yuan, with a revenue ratio of 46.87%.
Executive Profile:
Sun Yequan: male, born in 1971, Chinese nationality, bachelor degree, engineer, no right of abode abroad. Mr. Sun has been with the company since 1995 and has served as engineer, sales team manager, sales director, marketing director, deputy general manager, director and general manager, and vice president of UMC from 2010 to 2014. Mr. Sun Yequan has served as a director and general manager of the Company since July 2008.
Huajin Securities: GF Communications focuses on the three major areas of national defense, power and railway, and epitaxial mergers and acquisitions to enhance its core competitiveness
On March 22, 2024, Guangha Communication released its 2023 annual report, in 2023, the company achieved operating income of 451 million yuan, a year-on-year increase of 17.62%, net profit attributable to the parent company of 61.21 million yuan, a year-on-year increase of 25.39%, and non-net profit of 57.13 million yuan, a year-on-year increase of 21.11%.
The company has formulated a leading strategy for intelligent command and dispatch, and the company's performance has grown steadily
The company is mainly engaged in the research and development, production, sales and service of digital and multimedia command and dispatch systems and related products, and provides overall command and dispatch solutions for national defense, electric power, railways and other important national industries. In 2023, the national defense, electric power, and other sectors will achieve main revenues of 229.0 million yuan, 211.4 million yuan, and 10.55 million yuan, respectively, a year-on-year increase of 14.01%, 23.01%, and -1.17%. In 2023, the company's main products are command and dispatch systems, with the multimedia command and dispatch system achieving an operating income of 246.4 million yuan and a gross profit margin of 40.5%, and the digital command and dispatch system achieving an operating income of 176 million yuan and a gross profit margin of 63.47%. The company's profit distribution in 2023 is expected to be based on 249,170,606 shares, and a cash dividend of 1.00 yuan (tax included) will be distributed to all shareholders for every 10 shares, with a total cash dividend of 24.92 million yuan.
Build a three-in-one digital industrialization capability to empower industrial digitalization
At present, the company is positioned as a "leading enterprise in intelligent command and dispatch", and will gradually evolve from a communication equipment manufacturer to a pan-command and dispatch solution provider, and build a trinity of digital industrialization capabilities from "reliable communication network, pan-command and dispatch business, and digital service". The company invested 72.09 million yuan in R&D in 2023, accounting for 15.99% of its operating revenue. The company has developed key technologies and products such as program-controlled switching, softswitching, IMS, and 5GC. At the same time, it has a series of dispatch consoles in various forms, and has successfully applied advanced technologies such as speech recognition, voiceprint recognition, video analysis, and high-precision positioning to the command and dispatch scheme. In the future, the company plans to continue to focus on the "three-in-one" intelligent command and dispatch development strategy, integrate internal and external research resources, and strengthen core technology research and pre-research. In terms of 5G/6G layout, in 2023, the company completed the development and adaptation of 5G core network products, and achieved 100% localization of 5G core network. In addition, relying on independent and controllable 5G core network products, the company has successfully deployed 5G private network in wind power plants, achieving a breakthrough in the company's 5G private network deployment.
The field of communications is booming: comprehensive breakthroughs in electric power, railways, and national defense
In terms of power intelligent dispatching and communication, the company has signed contracts with the State Grid and China Southern Power Grid in many provinces to add functions such as voice recognition and intelligent linkage to improve the efficiency of power dispatching, and the power emergency command system has participated in a number of important activities, including Hangzhou Asian Games power protection communication, power peak summer, Guangzhou emergency drill, etc. During the reporting period, the company broke through the performance of Class I main line in national and local railways and obtained new orders, laying a solid foundation for the company's railway digital dispatching business. The application of the digital command and dispatch system in the railway industry is in the growth period, and it has been used in some railway bureaus, and has made a breakthrough in the performance of the first-class main line of the national railway during the reporting period. In the field of national defense, as a long-term core supplier of multimedia dispatching system, the company has successfully identified and delivered a number of military special products, maintaining a leading position in the subdivided field. At the same time, it actively participates in the construction of national defense informatization, extends information dispatching in IP dispatching and communication services, realizes full coverage of the information command system of a certain service and arms, deeply integrates user services, optimizes functions such as ground command, crew support, and flight training, and expands system application scenarios.
Epitaxial mergers and acquisitions to enhance the company's core competitiveness
In 2023, the company announced that it intends to acquire a controlling stake in Guangdong Jitong Information Development Co., Ltd., with a specific acquisition equity ratio of 60%. Jitong Information is a state-owned high-tech enterprise that adheres to innovation and development, and is committed to promoting the industrial application of a new generation of information technology such as the Internet of Things, cloud computing, big data, and artificial intelligence in smart space informatization. It is expected that after the reorganization, Guangha Communication and Jitong Information will complement each other's advantages and produce greater synergy. After the acquisition, the company will realize the coordinated development of business, customers, management and capital operation, further expand the original strategic positioning of information scheduling, and launch products + space services with the command center space information solution as the core. At present, the restructuring matter is still in the process, mainly because the company received the "Restructuring Inquiry Letter" from the China Securities Regulatory Commission, and has not yet replied to the "Restructuring Inquiry Letter" on the target company's "operating income and R&D investment in the last three years" in Question 1 of the "Restructuring Inquiry Letter". It is reported that Jitong Information's revenue in 2022 will be 270 million yuan, and it promises to deduct non-net profit of no less than 11.5 million yuan after mergers and acquisitions in 24 years.
Investment Advice:
Considering the company's business layout and technical strength in the field of defense/power/railway, we believe that the company will maintain high growth in the future. It is predicted that the company's revenue in 2024-2026 will be 6.00/8.10/1.101 billion yuan, a year-on-year increase of 33.0%/35.0%/36.0%, and the company's net profit attributable to the parent company will be 0.85/1.02/139 million yuan respectively, a year-on-year increase of 38.3%/20.2%/37.0%, corresponding to EPS 0.34/0.41/0.56 yuan, PE43.4/36.1/26.3.
Risk Warning:
The speed of mergers and acquisitions is not as fast as expected, market competition continues to intensify, and the collection of accounts receivable is not timely.
Source:
Huajin Securities-Guangha Communication-300711. SZ - Focus on the three major fields of national defense, power and railway, and extend mergers and acquisitions to enhance core competitiveness - 20240405
Investment advisory support: Yu Xiaoming Practicing certificate number: A0680622030012
Disclaimer: The above content is for reference only and does not constitute specific operation advice, and you shall operate at your own risk and profit and loss.