Flying Technology(SH:603488) Zheng Quan Zhi Xing·2025-06-24 17:25Core Viewpoint - The response from the company regarding the inquiry from the Shanghai Stock Exchange highlights the challenges faced by the company in meeting performance commitments after acquiring Lingwei Junrong, with a significant shortfall in net profit for 2024 compared to the promised figures [2][3][16]. Group 1: Performance Commitments and Financial Results - The company entered into a performance commitment agreement with Lingwei Junrong, stipulating net profits of 41 million, 70 million, 83 million, and 93 million yuan for the years 2024 to 2027, respectively [3][28]. - In 2024, Lingwei Junrong achieved a net profit of 24.27 million yuan, representing a completion rate of only 59.20% of the commitment [3][16]. - The company recognized an impairment loss of 5.19 million yuan on goodwill amounting to 271.27 million yuan resulting from the acquisition of Lingwei Junrong [3][16]. Group 2: Industry Context and Market Dynamics - The military simulation industry is rapidly developing, driven by advancements in artificial intelligence, big data, and simulation technologies, with a focus on enhancing military equipment's intelligence and operational effectiveness [4][6]. - The industry is closely linked to national defense spending and macroeconomic policies, with growth expected during periods of strategic adjustment or international tension [5][6]. - The market for military simulation in China has grown from 58.5 billion yuan in 2018 to 95.8 billion yuan in 2023, reflecting a compound annual growth rate of 10.4% [8][10]. Group 3: Competitive Landscape and Company Position - The military simulation market features two main competitors: state-owned enterprises and private companies, with the latter increasingly gaining market share due to improved production and R&D capabilities [7][8]. - Lingwei Junrong operates in a highly competitive environment with approximately 300 companies in the military simulation sector, where state-owned enterprises hold a brand and product advantage [8][10]. - The company’s gross margin is positioned at a mid-level compared to peers, with a focus on maintaining competitive pricing and technological capabilities to enhance market position [12][13]. Group 4: Future Outlook and Strategic Initiatives - The military simulation industry is expected to continue expanding as technology matures and application scenarios broaden, providing growth opportunities for companies like Lingwei Junrong [6][10]. - The company has initiated several strategic expansions, including the establishment of new divisions and a branch office, aimed at diversifying its business and enhancing future revenue streams [15][16]. - Despite the current challenges, the demand for military simulation products is anticipated to remain strong, driven by the military's increasing emphasis on realistic training and technological integration [15][16].