中兵红箭：低成本精确制导蓄势，多品类型号总装待发

Investment Rating - The report initiates coverage with a "Buy" rating for the company, citing its strong position in the defense and superhard materials sectors [7] Core Views - The company is a core player in the defense and civilian-military integration sector, with subsidiaries leading in superhard materials and ammunition assembly [7] - The company's subsidiary, Zhongnan Diamond, maintains a global market leadership in superhard materials, with a full-process technological advantage [5] - The subsidiary, Northern Hongyang, is expected to benefit significantly from the growth in low-cost precision-guided equipment [6] Company Overview - The company is a state-owned enterprise under the China Ordnance Industry Group, focusing on defense and civilian-military integration, with a strong emphasis on technological innovation and high-quality development [4] - It operates in three main business segments: special equipment, superhard materials, and specialized vehicles and auto parts, all of which have shown stable growth and improved competitiveness [4] Superhard Materials Segment - Zhongnan Diamond, a subsidiary, is the world's largest producer of superhard materials, with a dominant market share and advanced technological capabilities [5] - The company has a comprehensive advantage in the entire production process of superhard materials, from raw materials to final product testing [5] - Despite a decline in the industrial diamond market, Zhongnan Diamond continues to lead with its high-quality products and technological innovations [5] Special Equipment Segment - The company's special equipment segment has seen significant growth, with Northern Hongyang achieving a 242% increase in revenue in 2023, driven by increased orders and contract adjustments [6] - The company is well-positioned to benefit from advancements in precision-guided and long-range strike technologies, which are expected to drive future growth [6] Financial Projections - The report forecasts the company's net profit to reach 8.7 billion, 11.3 billion, and 15.3 billion yuan in 2024, 2025, and 2026, respectively, with year-on-year growth rates of 6%, 30%, and 35% [7] - The company's PE ratios are projected to be 21x, 17x, and 12x for the same years, indicating a strong growth trajectory [7] Industry Insights - The global superhard materials industry is dominated by China, with Zhongnan Diamond maintaining a leading position in both industrial diamonds and synthetic diamonds [5] - The precision-guided equipment sector is expected to see significant growth, driven by advancements in technology and increased defense spending [6] - The company's focus on technological innovation and capacity expansion positions it well to capitalize on these industry trends [7]