GLARUNTECH(SH:600562) Xin Lang Cai Jing·2025-12-23 06:32Investment Logic - Radar is an important detection device with broad demand in both military and civilian fields, with the company offering a complete range of defense and civilian models [1] - Defense radar includes airborne, ground-based, shipborne, and spaceborne types, with new installations and upgrades driving growth; for example, the U.S. airborne radar has around a thousand units delivered for each main fighter jet model, indicating significant demand [1] - Meteorological radar benefits from the Ministry of Water Resources' "three lines of defense" construction and long-term special government bonds; air traffic control radar benefits from low-altitude construction [1] - The company's controlling shareholder, the 14th Research Institute of China Electronics Technology Group Corporation, is the origin of China's radar industry, and the company serves as the listed platform for the 14th Institute, developing a diverse range of defense and civilian radars [1] Internationalization and Defense Trade - The defense company is oriented towards international operations and benefits from the expansion of radar military trade; global military spending has increased for 10 consecutive years, reaching a historical high, with various radar systems used in the India-Pakistan conflict providing practical validation that may further drive China's radar military trade exports [1] - The company's subsidiary, Guorui Defense, is focused on international operations; during the 2020 restructuring, the 14th Institute transferred all export-approved models and corresponding domestic models to Guorui Defense, covering third-generation fighter control radars, anti-stealth intelligence radars, and weapon positioning radars, while committing to avoid competition [1] - Guorui Defense is expected to achieve a net profit CAGR of 14.3% from 2021 to 2024, with a net profit margin of 25.7% in the first half of 2025, significantly outperforming peers [1] Industrial Software and Lifecycle Solutions - The subsidiary Guorui Xinwei provides autonomous industrial software and intelligent manufacturing solutions covering the entire product lifecycle for high-end equipment manufacturing industries such as aviation, aerospace, electronics, and shipbuilding, with the proprietary industrial software brand "REACH" forming a synergy with the radar main business [2] - The subsidiary Enruit is engaged in the rail transit control system business, shifting its focus towards providing operation and maintenance services, system upgrades, and operation management platform solutions [2] Profit Forecast, Valuation, and Rating - The company is expected to achieve operating revenues of 3.72 billion, 4.08 billion, and 4.88 billion yuan from 2025 to 2027, with year-on-year growth of 9.4%, 9.6%, and 19.7%; net profit attributable to the parent company is projected to be 690 million, 790 million, and 1 billion yuan, with year-on-year growth of 9.0%, 14.3%, and 27.4%, corresponding to EPS of 0.55, 0.63, and 0.81 yuan [3] - Given the company's position as a domestic leader in defense radar and its prominent advantages in military trade, it is expected to have strong growth potential, with a target valuation of 60 times for 2026, corresponding to a target price of 37.92 yuan; an initial "buy" rating is assigned [3]