Xingtu Xinke(SH:688081) Shenwan Hongyuan Securities·2025-06-23 05:49Investment Rating - The report initiates coverage with a rating of "Buy" for the company, indicating a positive outlook on its potential growth and market opportunities [8]. Core Insights - The company is a core supplier of video command systems, with a promising recovery in performance expected due to its dual focus on military and civilian markets. The demand for its products is gradually being released, and with orderly product delivery, revenue growth is anticipated to accelerate [7][8]. - The company has a strong technological foundation in low-latency encoding and video compression, which aligns well with the needs of military command systems. This positions the company favorably for future growth as military applications evolve towards greater automation and intelligence [11][44]. - The civilian market presents significant growth potential, particularly in areas such as judicial and oilfield applications, where the company's video transmission and warning products are increasingly in demand [7][8]. Summary by Sections 1. Core Supplier of Video Command Systems - The company specializes in video command control systems and has established a presence in both military and civilian sectors. Its main products include intelligent video command systems and video intelligence systems, which cater to various applications including military, judicial, and oilfield sectors [7][18]. - The company has experienced a stabilization in revenue since 2023, with video command products being the primary source of revenue and gross profit [34][36]. 2. Military Information Technology - The military command information system is a crucial component of national defense construction, evolving towards multi-platform information sharing. The company’s technology is well-suited to meet the specific demands of military applications, particularly in terms of information latency and transmission quality [44][45]. - The company has developed proprietary technologies that significantly reduce encoding latency, enhancing its competitive edge in military applications [11][44]. 3. Civilian Market Opportunities - The company’s video transmission and warning products are applicable in various civilian sectors, with significant growth expected in the video internet and judicial warning systems. The expansion into these markets is anticipated to contribute to new revenue growth [7][8]. - The company is actively expanding its application scenarios in civilian markets, which are expected to provide new growth drivers [7][8]. 4. Financial Forecast and Valuation - The company is projected to achieve net profits of 0.34 billion, 0.56 billion, and 0.82 billion yuan from 2025 to 2027, with corresponding price-to-earnings ratios of 53, 32, and 22 times [6][8]. - The current stock price is below the average valuation of comparable companies, indicating potential for upward adjustment as the company capitalizes on its leading technology and market expansion [8].