Group 1 - The company is transforming into a leading radar enterprise through asset restructuring, with performance expected to continue improving [1] - The company is backed by CETC 14th Institute, with two asset restructurings expanding into microwave and information technology as well as radar systems [1] - The main business includes radar equipment, industrial software, and smart manufacturing, with radar equipment being the core business covering both military and civilian sectors [1] Group 2 - Continuous deepening of national defense information construction is driving steady business growth, with military radar equipment expected to benefit from ongoing upgrades [2] - The company has completed full industry chain coverage from chips to systems to complete machines, aligning well with the defense equipment construction needs [2] - The global military trade environment is favorable, with increasing military expenditures and a shift towards system sales, enhancing growth potential [2] Group 3 - Civilian radar is expected to further enhance the company's revenue, with significant opportunities in weather radar and air traffic control radar [3] - The company has received major contracts for weather radar and is positioned as a key player in low-altitude perception network construction [3] - The company is rated as a "buy" due to its core supplier status in radar systems, benefiting from both domestic demand and military trade [3]

Investment Rating - The report initiates coverage with a "Buy" rating for the company, highlighting its potential for significant growth driven by both domestic demand and military trade [6][7]. Core Insights - The company is positioned as a leading radar manufacturer in China, benefiting from two major asset restructurings that expanded its capabilities in microwave and radar technologies [16][19]. - The ongoing increase in national defense spending and the modernization of military equipment are expected to drive demand for the company's radar products, particularly in the military sector [37][41]. - The company has a diversified product portfolio that includes military and civilian radar systems, industrial software, and smart transportation solutions, which collectively support its revenue growth [25][27]. Financial Data and Profit Forecast - Total revenue is projected to grow from 3,400 million yuan in 2024 to 5,441 million yuan in 2027, with a compound annual growth rate (CAGR) of 21.5% [2]. - Net profit attributable to shareholders is expected to increase from 630 million yuan in 2024 to 1,153 million yuan in 2027, reflecting a CAGR of 26.3% [2]. - The company's earnings per share (EPS) is forecasted to rise from 0.51 yuan in 2024 to 0.93 yuan in 2027 [2]. Business Segments - Radar Equipment and Related Systems: This segment is the core of the company's operations, contributing significantly to revenue and profit margins. The company has seen a steady increase in the delivery of radar systems, which has positively impacted its financial performance [27][29]. - Industrial Software and Smart Manufacturing: The company is expanding its footprint in the industrial software sector, with expected revenue growth from 4.20 million yuan in 2025 to 5.74 million yuan in 2027 [9]. - Smart Transportation: The company’s smart transportation solutions are being implemented in various urban rail projects, although revenue growth in this segment is projected to decline due to market conditions [8]. Market Opportunities - The military trade sector is experiencing a historical opportunity for growth, driven by global increases in military spending and the company's enhanced product offerings [6][10]. - The demand for civilian radar systems, particularly in meteorology and air traffic control, is expected to further bolster the company's revenue streams [4][21]. Competitive Positioning - The company is backed by the China Electronics Technology Group Corporation's 14th Research Institute, providing it with a strong technological foundation and competitive edge in radar technology [19][25]. - The report compares the company's price-to-earnings (PE) ratios favorably against peers, indicating potential undervaluation and room for growth [7][10].

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company's performance is driven by military trade product deliveries, with ongoing expansion into new business areas [2][12] - In H1 2025, the company achieved revenue of 1.72 billion yuan, a year-on-year increase of 10%, and a net profit of 350 million yuan, a year-on-year increase of 1% [4][12] - The Q2 2025 single-quarter revenue reached 1.36 billion yuan, a year-on-year increase of 36% and a quarter-on-quarter increase of 274% [4][12] Financial Performance - The company's radar system and subsystem business revenue was 1.55 billion yuan in H1 2025, a year-on-year increase of 16.57%, with a gross margin of 42.46% [12] - The company reported a gross margin of 41.28% in H1 2025, a slight decline of 0.12 percentage points year-on-year, and a net margin of 20.28%, down 1.89 percentage points year-on-year [12] - The company expects revenues of 3.73 billion, 4.49 billion, and 4.91 billion yuan for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 9.70%, 20.32%, and 9.48% [14] Business Segments - The G-end business continues to face pressure, while the main radar business benefits significantly from military trade growth [12] - The company has successfully bid for various civil radar projects, including meteorological radar and air traffic control systems, indicating a sustained push into civilian radar applications [13] Investment Recommendations - The report maintains a "Buy" rating, anticipating that the company will benefit from rising global military expenditures [14]

Investment Rating - The report assigns a "Buy-A" investment rating to the company with a 12-month target price of 37.86 CNY [4][7]. Core Views - The company achieved a revenue of 1.721 billion CNY in H1 2025, representing a year-on-year increase of 10.41%, with a net profit of 350 million CNY, up 1.15% year-on-year [1]. - The growth in military trade significantly contributed to a 36% revenue increase in Q2 2025, with a net profit growth of 19.2% [1]. - The defense radar business is a key growth driver, with radar systems and subsystems generating 1.55 billion CNY in revenue, a 16.57% increase year-on-year [2]. - The company maintains a strong focus on R&D, with H1 2025 R&D expenses reaching 76 million CNY, a 5.3% increase year-on-year [3]. Summary by Sections Financial Performance - In H1 2025, the company reported a revenue of 1.721 billion CNY, a 10.41% increase year-on-year, and a net profit of 350 million CNY, up 1.15% [1]. - Q2 2025 saw a revenue of 1.358 billion CNY, a 36.2% increase year-on-year, and a net profit of 274 million CNY, a 19.2% increase [1]. Product and Market Analysis - The radar systems and subsystems generated 1.55 billion CNY in revenue, with a gross margin of 42.46% [2]. - The company’s military trade projects have shown strong delivery performance, contributing to revenue growth [3]. Research and Development - The company invested 76 million CNY in R&D in H1 2025, reflecting a 5.3% increase year-on-year, indicating a commitment to maintaining its competitive edge [3]. Future Projections - The company is projected to achieve net profits of 742 million CNY, 871 million CNY, and 1.024 billion CNY for the years 2025, 2026, and 2027, respectively, with growth rates of 17.8%, 17.3%, and 17.7% [4].