Guandian Defense(SH:688287) Huachuang Securities·2024-03-24 16:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [9][39]. Core Insights - The company is a national-level specialized "little giant" with distinctive drone manufacturing and operation capabilities, focusing on drone service and manufacturing, with each segment contributing approximately 50% to total revenue [1]. - The drone service segment has a high gross margin, with drug control services accounting for a significant portion of this business [1]. - The company has a strong competitive edge in the domestic drone drug control service market, leveraging first-mover advantages, extensive image data accumulation, and core algorithm iterations [1]. Summary by Sections Main Business - The company operates in two primary areas: drone service (including flight services and data processing) and drone system manufacturing, with each segment contributing roughly half to total revenue [1]. - The drone service business has a gross margin of about 60%, with drug control services making up 58% of this segment in 2021 [1]. Core Highlights - The integration of drones and data elements is expected to accelerate the company's expansion into multiple fields beyond drug control services, driven by the low-altitude economic wave [1]. - The company has established itself as a leading provider of drone drug control services, supported by three main advantages: first-mover advantage, extensive image data coverage, and continuous algorithm improvements [1]. - The drone flight service market shows potential for both volume and price increases, with the average bidding price for drug control services rising from 141 RMB to approximately 300 RMB per square kilometer [1][37]. - The company's core capabilities are replicable across various sectors, including agricultural protection and environmental monitoring, with the low-altitude economic trend further catalyzing this expansion [1][38]. Financial Characteristics - The company has demonstrated strong growth, with a compound annual growth rate (CAGR) of approximately 26% in profits over the past decade, maintaining a gross margin around 50% and a net margin above 30% [1]. - The financial forecasts predict net profits of 82 million, 107 million, and 140 million RMB for 2023, 2024, and 2025, respectively, with growth rates of 31% and 30.6% for the latter two years [8][39]. Investment Recommendations - The report anticipates revenue growth for the drone service business to exceed 20% annually from 2024 to 2025, driven by increased operational area and pricing [8]. - The company is compared favorably against peers in the A-share drone sector, with lower projected price-to-earnings (PE) ratios, suggesting a favorable investment opportunity [39].