Genew(SH:688418) Dongxing Securities·2024-09-24 00:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [2][25]. Core Views - The company possesses autonomous and controllable R&D capabilities in core network technology, continuously investing in 5G communication network systems and satellite internet development, making it one of the few domestic companies with core network technology capabilities in satellite internet [2][11]. - The company is actively participating in the China Star Network low-orbit satellite core network project, which is crucial for the integration of satellite and terrestrial communication networks, positioning the company favorably in a rapidly growing market [2][14]. - The domestic satellite internet market requires technology to be autonomous and controllable, providing opportunities for the company as competitors like Ericsson and Nokia face restrictions [2][18]. Summary by Sections Core Network as an Important Component of Satellite Internet - The core network is a vital part of the satellite-ground integrated communication architecture, which includes terminal, wireless access network, bearer network, and core network [9]. - The satellite internet core network consists of both ground and satellite core networks, with the current focus on reducing latency and improving service efficiency through satellite-based data forwarding [9][18]. Participation in China Star Network Low-Orbit Satellite Project - The China Star Network, established with state-owned enterprises, is set to receive significant support for its development, enhancing the company's involvement in the project [14]. - The company won the bid for the prototype system project of the low-orbit satellite core network in 2022 and is involved in setting technical standards and system construction [2][17]. Growth Prospects for Core Network Business - The company is expected to benefit from the rapid growth of the domestic satellite internet market, with projected revenues of 1.02 billion, 1.29 billion, and 1.56 billion yuan for 2024, 2025, and 2026 respectively [2][25]. - The core network business is anticipated to see significant growth as the China Star Network progresses into regular launch phases, with a high gross margin expected due to the nature of software and R&D costs [18][19]. Financial Forecasts - The company is projected to achieve revenues of 1.02 billion yuan in 2024, with net profits of 9.21 million yuan, and a PE ratio of 303x [2][25]. - The financial outlook indicates a recovery from previous losses, with expectations of profitability starting in 2024 as operational efficiencies improve [21][25].