Guobo Electronics (688375) 国元证券·2024-09-03 00:13Investment Rating - Buy | Maintain [5] Core Views - The company's performance is under short-term pressure, with H1 2024 revenue declining by 32.21% YoY to RMB 13.03 billion, and net profit attributable to shareholders decreasing by 20.77% YoY to RMB 2.45 billion [1] - The decline in revenue is mainly due to reduced income from T/R components and RF modules, which fell by 36.5% YoY to RMB 11.69 billion, accounting for 91.09% of total revenue [2] - RF chip revenue grew significantly by 35.68% YoY to RMB 0.88 billion, driven by 5G-A base station pilot projects [2] - Operating cash flow improved significantly, increasing by 154.88% YoY to RMB 3.61 billion, mainly due to increased cash receipts from matured bills [3] Business Performance - T/R components and RF modules remain the core business, contributing 91.09% of total revenue, despite a 36.5% YoY decline [2] - RF chip business showed strong growth, with revenue increasing by 35.68% YoY to RMB 0.88 billion, driven by 5G-A base station demand [2] - Other chip revenue grew by 74.50% YoY to RMB 0.27 billion, indicating diversification in product offerings [2] Financial Health - Inventory turnover improved, with inventory decreasing by 37.89% compared to the end of 2023 to RMB 3.83 billion [3] - Contract liabilities increased by 265.73% compared to the end of 2023 to RMB 0.21 billion, reflecting higher prepayments [3] - Construction in progress increased by 63.25% compared to the end of 2023 to RMB 2.90 billion, indicating ongoing investment in RF integrated circuit projects [3] R&D and Innovation - R&D expenses increased slightly by 0.49% YoY to RMB 1.80 billion, accounting for 13.81% of revenue [5] - The company is focusing on W-band active phased array microsystems and low-profile broadband millimeter-wave digital arrays [4] - New GaN RF module products were launched in H1 2024, with further improvements in linearity and efficiency expected in the second half of the year [4] - The company is expanding into new areas such as low-orbit satellites and commercial aerospace, with several products already delivered to customers [4] Future Outlook - The company is expected to recover as military industry demand normalizes, with projected net profits of RMB 5.9 billion, RMB 7.1 billion, and RMB 8.7 billion for 2024-2026 [8] - EPS is forecasted to be RMB 1.00, RMB 1.19, and RMB 1.47 for 2024-2026, with corresponding PE ratios of 39x, 33x, and 27x [8] - The company is actively developing new products for next-generation base stations and satellite communication chips, with some products already in customer certification stages [4]