Wuhan Van Valley Digital Microwave project faces multiple risks

The company faces structural adjustment 2009 Wuhan Fan (002194, closing price 17.32 yuan) The purpose of implementing structural adjustment is to ensure sustainable development in the next 3-5 years. The company's structural adjustment has two levels of meaning: first, the development of overseas markets, mainly to further increase NSN and Ericsson's procurement share, the current NSN has been a breakthrough in scale, more importantly, the recent company has obtained the qualification of Ericsson Global qualified suppliers, the market structure is obviously optimized; second, the company will accelerate the adjustment of product structure,　　Focus on the digital microwave project and the project process of the tower top amplifier, to achieve a diversified business in RF-related fields, the 2009 tower will be expected to achieve billions of income, and digital microwave is expected to achieve small production. National Gold Securities, the company on the one hand, in order to balance the domestic equipment manufacturers in the price of suppliers of vicious repression, it is possible to reduce the gross profit margin and further expand the share of overseas markets, thus forming a domestic market and overseas market checks and balances, which undoubtedly for the long-term sustainable development of the company to provide On the other hand, the company will increase the investment in new projects, including financial, material or human resources, it is possible to increase management costs.　　Overall, the national Gold securities on the company's strategic implementation plan is positive, the company plans to increase the transition this year, is expected to impact on short-term performance, but to solve the company's sustainable development problems. From the company's product costs, the company's product prices and product costs will appear synchronized decline, the main reason is the decline in the price of financial raw materials, bulk product implementation of die-casting technology will also make the cost of production significantly reduced. In addition, the domestic 3G business demand, the company drastically reduce the possibility of the initiative to reduce the power of the main target overseas markets, especially for Ericsson and NSN Market, the National Gold Securities think the company has a strategic price reduction power, but this business gross margin is higher, income accounted for less than 40%,　　The decline of the overseas business gross profit margin has limited influence on the company's overall business profit margin. Digital microwave project will be put into production this year the prototype of the PDH microwave transmission system has been developed in 2008, the key performance indicators reached the international level, in order to develop the global microwave market to subvert the low-cost products, the company has done several times the design optimization, the company is expected to achieve small-scale production in 2009,　　2010 to achieve High-volume sales. 2008 Global Digital Microwave Communications market scale of 6 billion U.S. dollars, the United States famous microwave company Harris believes that the benefits of global mobile bandwidth popularization and upgrade, microwave communications will be expected to maintain 6%~8% growth in the next 4 years, to 2011 to reach 8 billion U.S. dollars. NEC, the new global microwave communications overlord, its competitive advantage lies in the complete industry chain, technology precipitation, low-cost, rapid delivery, regardless of the competition from customer resources or cost competitive advantage, NEC will be the main barrier to enter the microwave market. The management strategy of the microwave project is the integrated advantage of RF passive technology and microwave active technology, the cost advantage brought by the integration of industry chain, the international marketing platform, and the customization advantage of low-cost research and development.。 The company's 2010 project investment is expected to reach 1~2 billion, the project is expected to value 16~25 billion, but if the project investment failure, the company faces at least 100 million yuan loss.　　At the same time, the project also faces the market risk that the market barrier is difficult to break through, the technology innovation is difficult to obtain the technical risk of the market identification, and the multiple risks of the shortage of microwave talents. Investment proposal: The company is expected to achieve revenue of 2009 1.87 billion yuan (growth 33.24%), EPS for 0.73 yuan (growth rate of 23.1%), 2010-year income is expected to be 2.67 billion yuan (growth 43%), EPS is expected to 1.03 yuan (growth rate of 41.9%).　　Using FCFE discount valuation, assuming that the company's subsequent growth rate TV is 3%, the capital cost is 11%, the company shares a reasonable price of 21.62 yuan, to give the investment rating to buy. National Gold Securities