CATEC(600879) 华泰证券·2024-08-09 06:03Investment Rating - The report initiates coverage with a "Buy" rating for the company [2]. Core Views - The company is positioned as a dual leader in aerospace electronics and unmanned systems, with plans to divest its civil business and focus on its core areas, which are expected to experience significant growth [2][3]. - The company is projected to achieve net profits of 731 million, 915 million, and 1.093 billion RMB for the years 2024, 2025, and 2026 respectively, with corresponding EPS of 0.22, 0.28, and 0.33 RMB [2][6]. - The target price is set at 11.66 RMB, based on a PE ratio of 53 for 2024, which is significantly lower than the average PE of comparable companies at 53 times [2][3]. Summary by Sections Company Overview - The company is a listed platform under the China Aerospace Science and Technology Corporation's Ninth Academy, focusing on aerospace electronics and unmanned systems, with a strong technical foundation and extensive experience in supporting core aerospace projects [3][13]. - The company plans to divest its wire and cable business to concentrate on aerospace and military sectors, enhancing its overall competitiveness [13][21]. Aerospace Electronics - The company has a comprehensive capability in developing and producing aerospace electronic components, including control communication systems, navigation products, and satellite applications, which are critical for rockets, satellites, and military equipment [19][20]. - The rapid development of commercial aerospace is expected to benefit the company, particularly in areas like laser communication systems, which have a projected market space of approximately 63.9 billion RMB over the next decade [3][19]. Unmanned Systems - The company is a leading supplier of military-grade unmanned systems, including drones and precision-guided munitions, with products already recognized internationally [4][20]. - The market for unmanned systems is anticipated to grow significantly, with the global loitering munition market expected to reach 3.04 billion USD by 2030, growing at a CAGR of 14.2% from 2023 to 2030 [4][20]. Financial Projections - The company forecasts revenues of 18.206 billion, 19.342 billion, and 21.911 billion RMB for 2024, 2025, and 2026 respectively, with a slight decline in 2024 followed by growth in subsequent years [6][22]. - The projected net profit margins are expected to improve as the company focuses on higher-margin aerospace and military products [15][21]. Strategic Initiatives - The company is actively participating in the development of low-altitude economy initiatives, with its joint venture, Aerospace Feipeng, focusing on logistics drones and having already achieved significant milestones in regulatory approvals [5][14]. - The company aims to enhance its asset quality and transform into a comprehensive defense contractor, leveraging its strong market position and technological capabilities [15][23].