The "little giant" of military network bus and special display actively expands the field of civilian products
·Guide·
- A leading enterprise in military network bus and special display, with revenue of 216 million yuan (+28%) in 2023
- Steady growth in defense spending + broad civilian market, the company's FC bus fills the gap in related fields in China
- There is a gap in the industry in the field of special LED display, and the company's LED dome vision system technology is the first in China
- The PE 2023 suspension price corresponding to the suspension price of Chengdian Guangxin Third Board is 12X, and the average PE 2023 of comparable companies is 34X
·Click to read the series of reports·
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A leading enterprise in military network bus and special display, with revenue of 216 million yuan (+28%) in 2023
Chengdian Optoelectronics is a "little giant" enterprise engaged in the R&D, production and sales of network bus products and special display products, the main products include FC network data communication card, FC network data simulation and monitoring system, LED dome vision system, etc., which are currently used in the field of national defense and military industry. From the perspective of product structure, special display products are the company's main source, with revenue of 119 million yuan in 2023, accounting for 55% of total revenue; Network bus products are the second largest source of revenue, with revenue of 93 million yuan in 2023, accounting for 43% of total revenue. The company's downstream customers are mainly subordinate units of large domestic military industrial groups such as AVIC, China Shipbuilding, and China Electronics Technology, and the end users are the military. In 2023, the revenue will be 216 million yuan (+27.72%), the net profit attributable to the parent company will be 45.0447 million yuan (+33.98%), and the gross profit margin/net profit margin will be 50.40%/20.84% respectively. According to the company's prospectus, it is expected to achieve revenue of 271 million yuan in 2024, a year-on-year increase of 26%; The net profit was 51.45 million yuan, a year-on-year increase of 14%. Steady growth in defense spending + broad civilian market, the company's FC bus fills the gap in related fields in China
According to the data of the Ministry of Finance, the national defense expenditure budget is expected to be 1.67 trillion yuan in 2024, a year-on-year increase of 7.2%, significantly higher than the GDP growth rate in the same period. FC network bus has the advantages of high bandwidth, low latency, high reliability, and support for a variety of upper-layer protocols, and is the first to be used in F-22, F-35 and other fourth-generation fighters in the world, and is currently the most advanced type of first-generation network bus. The company's network bus products are mainly used in the fields of data simulation, monitoring and communication of special bus networks related to military equipment. A number of R&D achievements of the company's FC network bus have been identified by authoritative departments to reach the leading level in China, filling the gap in related fields in China. The two series of high-speed network communication components and avionics network simulation, monitoring and testing equipment have been successively applied to the principle verification, R&D and commissioning, production equipment and maintenance and testing of major models of WQ equipment in mainland China. With the continuous promotion of the application of FC network bus technology in the fields of aerospace, ships, vehicles and weapons, the market application space will be further expanded. In addition, the company plans to develop a new generation of TSN network bus, and the main products will be expanded to the civilian field.
There is a gap in the industry in the field of special LED display, and the company's LED dome vision system technology is the first in China
In 2017, the company began to focus on the layout of the special display industry, which has now become one of the main revenue components. The company's first LED dome vision system technology, and after long-term development and continuous update iteration, it solves a number of key technical problems such as nonlinear distortion geometric correction unique to spherical display, with many advantages such as high brightness, high contrast, wide color gamut, long life, short response time, etc., which can provide more realistic display effects and stronger visual immersion. It has been put into practical use in the flight training of the mainland's new main fighters.
The PE 2023 suspension price corresponding to the suspension price of Chengdian Guangxin Third Board is 12X, and the average PE 2023 of comparable companies is 34X
The PE attributable to the parent company in 2023 corresponding to the suspension price of Chengdian Guangxin's third board is 12.4X, which is lower than the average PE of comparable companies in 2023 of 33.6X. The fundraising plans to use the raised funds of 150 million yuan in the "FC network bus and LED dome industrialization project", "headquarters building and R&D center project" and supplementary working capital. Considering the company's technology and brand advantages, the stable development of the downstream military industry, and the existence of a large potential market in the civilian field, the company is expected to further improve the industry penetration, it is recommended to pay attention. Analyst:
诸海滨：S0790522080007
Zhao Hao: S0790522080002 report date: June 23, 2024
Risk warning: the risk of independent innovation of technology, the risk of dependence of major customer business, and the risk of IPO breakage
1. Let's take a look at the company first: focusing on the "little giant" yuan of specialization, refinement, and innovation of network bus and special display (+28%)
Chengdian Guangxin was established on May 27, 2011, and changed to a limited liability company on May 7, 2014, with the full name of Chengdu Chengdian Guangxin Technology Co., Ltd. At present, the company's main products include network bus products and special display products. From the perspective of the development process of Chengdian Optoelectronics, the company has experienced three stages of development. The first phase focuses on the FC network bus stage, which is from 2014 to 2016, and in this stage, the company's main products are FC network bus products. The second stage is from 2017 to 2021, which is the key layout of special display stage, the company began to develop and continuously update and iterate the LED visual system, and finally passed the military product appraisal in 2021 and supplied in batches. In the third stage, the company realizes the two-wheel drive development stage of network bus and special display, and the timeline is from 2022 to the present, with special display products becoming the main source of income, and network bus products also accounting for a large proportion of revenue, jointly promoting the company's development.
1.1. Equity structure: Qiu Kun, Xie Jun and Fu Mei acted in unison, holding a total of 46.53% of the shares
The legal representative of Chengdian Guangxin is Xie Jun, the company does not have a controlling shareholder, Qiu Kun, Xie Jun and Fu Mei have signed a concerted action agreement to jointly control the company and are the actual controllers of the company. As of the end of December 2023, Qiu Kun directly held 10,878,430 shares of the company, accounting for 20.46% of the company's registered capital; Xie Jun directly holds 7,164,459 shares of the company, accounting for 13.47% of the company's registered capital; Fu Mei directly holds 6,696,260 shares of the company, accounting for 12.59% of the company's registered capital; The above three persons hold a total of 24,739,149 shares of the company, accounting for 46.53% of the company's registered capital. Other major shareholders holding more than 5% of the company's shares are Bao Yongming holding 5,300,000 shares, with a shareholding ratio of 9.97%, and Sichuan State-owned Investment Property Trusteeship Co., Ltd. holding 3,534,300 shares, with a shareholding ratio of 6.65%.
1.2. Product business: deeply cultivate network bus products and special display products, two-wheel balanced drive
Chengdian Optoelectronics' main business is the R&D, production and sales of network bus products and special display products, which are mainly used in the field of national defense and military industry. Since its establishment, it has been committed to the research and development of network bus products, especially FC network bus products. FC network bus has the advantages of high bandwidth, low latency, high reliability, and support for a variety of upper-layer protocols, and is the first to be used in F-22, F-35 and other fourth-generation fighters in the world, and is currently the most advanced type of first-generation network bus. In 2017, it began to focus on the layout of special display fields, and the revenue proportion of the company's special display products has continued to increase, and it is currently one of the main revenue components.
1.2.1. Network bus products: FC bus technology is mainly used for data simulation of military equipment
Network bus products are mainly used in the fields of data simulation, monitoring and communication of special bus networks related to military equipment. The FC network bus technology mainly used in the company's network bus products has the dual advantages of channel and network, with the advantages of high bandwidth, high reliability, high stability, and resistance to electromagnetic interference.
Network bus products are mainly divided into two categories: one is high-speed network communication components. The component mainly comprises an interface component, a switching component or a conversion component for realizing a high-speed network communication protocol, the interface component is installed in a military electronic equipment to realize the external bus communication of the device, the switching component is an independent device or module to realize the data exchange of the network bus, and the conversion component is mainly used to realize the data protocol conversion of different interfaces. The second is avionics network simulation, monitoring, and testing equipment. The equipment is usually composed of a board and equipment with a bus interface, and the simulation and simulation of the airborne equipment and system, data excitation, data acquisition, fault injection and other functions are realized by running the test software, and the simulation and testing of the avionics equipment and system functions are realized from the perspective of the network bus interface and the application function of the object under test
1.2.2. Special display products: including special LED display and liquid crystal reinforced display
The company's special display products include special LED display products and liquid crystal ruggedized display products, which are mainly used in the field of military simulation training. Among them, the representative product of the company's special LED display products is the LED dome vision system, which has the characteristics and advantages of high refresh rate, high definition, large field of view, high contrast, long life, easy maintenance, easy transportation and installation, and has achieved systematization, standardization and modularization in accordance with the requirements of equipment development. As a visual display system of military simulation training system, its main role is to provide realistic training scenarios for trainees. The liquid crystal rugged display product is an electronic device that simulates the airborne multi-functional display system in terms of shape and function, which is mainly installed in the flight simulation cockpit and is used in simulated flight training, aircraft maintenance training and scientific research and other scenarios.
The LED dome vision system products have gone through 5 iterations, from the earliest first-generation 2m*2m (7 m diameter) spherical curtain rough sample, to the latest fifth-generation LED dome vision system in 2021, which gradually solves the key technical problems such as high-gray image display driver under low-brightness conditions, display effect realization of high-precision splicing night flight training of LED light boards, low-latency video image transmission, multi-channel high-precision video synchronization, nonlinear distortion geometry correction unique to spherical display, and LED light board seams. And continue to optimize its modularity, standardization and high reliability, and finally pass the military product identification and mass supply.
The revenue of the special display products business in 2023 will be 118.8103 million yuan, accounting for 54.98% of the total revenue, and the gross profit margin will reach 37.68%. From 2020 to 2023, the revenue of special display products will be 8.0553 million yuan, 79.3153 million yuan, 93.4965 million yuan, and 118.8103 million yuan respectively. Since 2021, special display products have accounted for more than 50% of the revenue, which is currently the main source of revenue. The revenue of the network bus product business was 26.1912 million yuan, 37.6947 million yuan, 70.7179 million yuan and 92.7366 million yuan respectively, accounting for 64.63%, 31.06%, 41.80% and 42.91% of the total revenue respectively. The rapid increase in revenue generation from 2020 to 2023 is mainly due to the significant increase in sales of specialty display products and the steady growth of the network bus products business. From the perspective of gross profit margin, the gross profit margin of the network bus product business and the special display product business are relatively stable, but the gross profit margin of the network bus product business is significantly higher than that of the special display product business, which is about 62% and 40% respectively.
Chengdian Optoelectronics sells products and services through direct sales, and the operating income generated by direct sales accounts for 100% of the company's total revenue. The company's business sources are mainly new business and new customer business of old customers, the main customers are subordinate units of large domestic military industrial groups, and the end users are the military. The main customers are subordinate units of large domestic military industrial groups such as AVIC, China Shipbuilding, and China Electronics Technology. The sales prices of the company's main products remained basically stable. In 2023, the company's top 5 customers will account for 95.77% of the sales revenue, and the sales revenue of the first largest customer will account for more than 85%, and the customers will be relatively concentrated.
1.3. Technology R&D: In 2023, it will have 30 invention patents, and the R&D expense rate will be 7%
Independent research and development of core technology. The company and its core technical team have won industry authoritative awards including the second prize of National Technological Invention, the second prize of National Defense Technological Invention, and the third prize of National Defense Technological Invention. At present, the company has 30 invention patents and a number of utility model patents, design patents, software copyrights, etc., and has formed a number of independent intellectual property rights with advanced properties in the field of network bus and special display.
END
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