Hunan Aerospace Huanyu (SH:688523) Tebon Securities·2025-01-22 10:23Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2]. Core Views - The company is positioned to benefit from the growth in low-altitude and satellite internet sectors, with expectations of comprehensive advantages in both space and ground communications [5]. Summary by Sections 1. Focus on Aerospace Field - The company has been dedicated to the aerospace sector for 20 years, establishing four major product lines [14]. - It has a stable shareholding structure with a management team that possesses extensive industry experience [19]. - Revenue has shown steady growth, with a compound annual growth rate (CAGR) of 22.57% from 2019 to 2023 [24]. - The company has deep ties with the military industry, with aerospace and communication sectors contributing significantly to revenue [28]. 2. Deep Participation in China's Aerospace - The company has a leading position in traditional aerospace, recognized for its work with major clients [35]. - It has integrated resources and transformed its core technologies to build a revenue moat [45]. - The company is expected to benefit from the scaling of satellite internet construction, supported by government initiatives [51]. 3. Strong Ties with Core Aviation Clients - The modernization of China's air force and the broad civil market present significant growth opportunities [3]. - The company has penetrated the domestic aircraft supply chain, establishing strong relationships with key clients [3]. - The integration of aviation and tooling resources, along with the potential for drone market expansion, is promising [3]. 4. Revenue Forecast and Valuation Analysis - The company forecasts total revenues of 500 million, 876 million, and 1,102 million yuan for 2024, 2025, and 2026, respectively, with net profits of 144 million, 271 million, and 350 million yuan [6]. - The price-to-earnings (PE) ratios for 2024-2026 are projected at 52.21, 27.72, and 21.49 times, respectively, indicating growth potential compared to peer companies [6].