At present, our country mainly has two giant satellite Internet constellations, namely the “GW” constellation led by China Star Network Group and the Qianfan Constellation led by Shanghai Yuanxin, also known as the “G60” constellation. The “GW” constellation currently launches only test satellites, and no network satellites have been launched yet. Qianfan Star Network has currently conducted two network satellite launches. At 14:42 on August 6, 2024, the Qianfan Constellation Polar Orbit 01 satellite was successfully launched. At 19:06 on October 15, 2024, the Qianfan Constellation Polar Orbit 02 satellite was successfully launched. Both launches were carried out in the “18-satellite-one-shot” manner, and the satellites successfully entered the intended orbit. The first two launches of networked satellites were more about verification of technology and solutions. After the technology and solutions are proven, the importance of the supply chain will become increasingly important. Next, let’s briefly talk about the core supply chain enterprise of Qianfan Constellation-Shanghai Hanxun Information Technology Co., Ltd.
1. Company Profile
Shanghai Hanxun Information Technology Co., Ltd., stock code 300762, is funded by 11 legal persons including Shanghai Shuangyou Information Technology Co., Ltd., Shanghai Liding Investment Management Co., Ltd., CICC Jiaxun (Tianjin) Investment Center (Limited Partnership), etc., and was restructured and established on November 2, 2016 through Shanghai Hanxun Wireless Technology Co., Ltd. Listed on the Shenzhen Stock Exchange in March 2019. The company is mainly engaged in the research and development, manufacturing, sales and engineering implementation of industrial broadband mobile communication equipment. It combines business application software, command and dispatch software and other supporting products to provide customers with overall solutions for industrial broadband mobile communication systems. Currently, the major shareholders of Shanghai Hanxun include Shanghai Shuangyou Information Technology Co., Ltd. (17.76%), Shanghai Institute of Microsystems and Information Technology, Chinese Academy of Sciences (4.22%), Shanghai Lianhe Investment Co., Ltd. (3.75%), Hong Kong Securities Clearing Company Limited (1.36%), Du Shuiping (1.13%), etc. Most of the key members of the company come from the Communications Laboratory of Shanghai Institute of Microsystems, Chinese Academy of Sciences. Shanghai Hanxun and Shanghai Yuanxin, the construction and operator of Qianfan Constellation, are related enterprises. According to the “Announcement of Shanghai Hanxun Information Technology Co., Ltd. on Confirming Daily Related Transactions in 2023 and Estimated Daily Related Transactions in 2024”, the amount of related transactions between Shanghai Hanxun and Shanghai Yuanxin in 2024 will not exceed 200 million yuan.
2. Company business analysis
(1) Traditional business analysis
From the perspective of this business, Shanghai Hanxun is one of the few companies in the industry that not only owns independent core intellectual property rights, but also has a deep understanding of industry customer needs. As the overall technical unit, Shanghai Hanxun participated in the development of the “Development Project of a General Equipment Model for Private Network Broadband Mobile Communication Systems”. Based on the fourth generation civilian mobile communication technology (4GTD-LTE) and in response to the special needs of customer applications, Shanghai Hanxun has achieved a series of technological innovations and breakthroughs in aspects such as high-mobility long-distance communication, self-organizing network communication, spectrum sensing, broadband anti-interference communication, and system self-synchronization. The company’s products cover private network broadband communication chips, communication modules, terminals, base stations, application systems, etc. It has formed a full industry chain layout of “chips – modules – terminals – base stations – systems”, achieving independent controllable R&D and production. Shanghai Hanxun has been focusing on model products before. Although model products generally take 3-5 years from project establishment to finalization, once a model product is formed, the life cycle of the product is also longer. Only model products can be included in the installation and procurement catalog of the annual budget of relevant national special industries. Having a variety of installed model products is also one of Hanxun’s core competitiveness in special industry communications. While these businesses have brought advantages to Hanxun, they have also brought some adverse effects. The procurement of these special customers is highly planned, and the project cycle is generally relatively long. During procurement, small batches are generally purchased first, and after trial approval, larger batches are continued to be purchased. This leads to a certain degree of uncertainty in the company’s revenue. If the customer’s purchasing plan changes, the company’s product sales will be greatly affected. Moreover, the risk of excessive concentration of customers in Shanghai Hanxun is also obvious. In 2020, 2021, 2022, and 2023, the total sales amount of the company from the top five customers (according to the consolidated caliber of companies under the control of the same actual controller) accounted for the proportion of total annual sales respectively. accounted for 77.25%, 71.23%, 73.35%, and 72.82%, and the first customer accounted for 38.98%, 42.64%, 51.50%, and 23.32% of total annual sales respectively.
(2) Satellite Internet business
In terms of low-orbit satellite Internet, Shanghai Hanxun mainly carries out the research and development of low-orbit satellite communication subsystem equipment. As the research unit of the Qianfan constellation communication subsystem, it is responsible for the guarantee and support of the constellation communication subsystem, and develops and supplies relevant satellite communication payloads, satellite communication terminals and other key communication equipment. In April 2024, Shanghai Hanxun established Hanque Information subsidiary to specialize in the research, development and manufacturing of low-orbit satellite payload systems. The ground base station and test terminal development project that Hanxun won the bid at the end of 2023 has been successfully delivered at the end of 2023.
In 2024, there will be frequent actions between Shanghai Hanxun and Shanghai Yuanxin:
In May 2024, Shanghai Hanxun won the full bid for Shanghai Yuanxin’s two low-orbit satellite constellation communication simulation and verification platform projects, “Low-orbit satellite constellation communication system on-orbit verification platform” and “Low-orbit satellite constellation system access network system simulation parameter configuration module and protocol module development”. The winning bid amounts were 17.76 million and 2.46 million respectively.
On July 16, 2024, Bu Zhiyong, the former chairman of Shanghai Hanxun, resigned and became CEO of Shanghai Yuanxin.
On August 9, 2024, Shanghai Hanxun won the bid for Shanghai Yuanxin’s “Gateway Station and Terminal Communication Business Radio Frequency Loopback System Project”.
On September 30, 2024, Shanghai Hanxun won the bid for Shanghai Yuanxin’s “Demonstration Satellite Terminal Procurement Project”, with the winning bid amount reaching 82.15 million yuan.
3. Company development analysis
Shanghai Hanxun’s historical four-year comprehensive rate of return is 11.74%, of which the dividend yield is 0.63%, the rate of return brought by performance growth is 189.00%, and the rate of return brought by valuation improvement is -177.93%. In the first three quarters of this year, Shanghai Hanxun’s revenue decreased by 11.80%, 27.56%, and 18.38% compared with the same period last year; the net profit attributable to shareholders of listed companies increased or decreased by -21.23% compared with the same period last year. , -252.81%, -45.37%; the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses increased or decreased by 19.95%, -67.42%, or -18.40% compared with the same period last year. The net cash flow generated from operating activities increased or decreased by 30.07%, -11.21%, or 11.90% compared with the same period last year. As of the third quarter, total assets increased or decreased by 3.55% compared with the end of the previous year. Among them, total operating income in the third quarter increased by 1.02% year-on-year and 83.87% month-on-month, while net profit decreased by 1.34% year-on-year and 15.91% month-on-month. The main reasons for the decrease in net profit are that credit impairment losses/total operating income increased from 30.40% to 43.53%, which reduced net profit growth by 19.17%; the administrative expense rate increased from 13.69% to 24.42%, which reduced net profit growth by 15.67%; and the gross profit margin increased from 31.86% to 49.85%, which reduced net profit growth by 26.27%.
It can be seen from Hanxun’s financial report: In terms of upstream and downstream price negotiations, Hanxun occupied 292 million upstream, but 986 million was occupied by downstream, and the overall capital was in a state of net outflow. In addition, the company’s proportion of credit impairment losses is also increasing, increasing by 5.07% from last year to 7.67%. The restricted funding ratio and restricted asset ratio also increased, increasing by 0.68% and 0.38% respectively, reaching 0.69% and 0.39%.
