1. Corporate Culture: Low-Key and Pragmatic ‘Military Craftsman’
This company, headquartered in Chengdu, does not have the high-profile publicity of Huawei, nor does it appear frequently at consumer electronics exhibitions like DJI. However, when I delved into its official website, I was attracted by the corporate mission of ‘Achieving Together, Making Choices Simpler’ — these eight words seem plain but precisely summarize the core logic of the military industry.
On Zhimingda’s recruitment page, the ‘Dual-Track Promotion Mechanism’ and ‘Equity Incentives’ are prominently highlighted. This reminds me of a former employee’s comment in 2016: ‘When project deadlines are tight, we need to work overnight, but the meal subsidies and flexible working hours are quite humane.’ This culture of ‘wolf-like ambition combined with warmth’ is rare in military enterprises. Notably, the company’s R&D team accounts for as much as 60%, and it has established joint training bases with universities such as the University of Electronic Science and Technology, reminiscent of Huawei’s ‘pressure-driven innovation’ R&D model.
However, this culture also brings a double-edged sword effect. The 2024 financial report shows that the company’s R&D investment decreased by 19.68% year-on-year, while sales expenses increased against the trend during the same period. This may reflect that under the pressure of declining orders, management had to adjust resource allocation. In my view, this precisely reflects the typical characteristics of military enterprises: seeking a balance between technological accumulation and market expansion.
2. Competitors: ‘Special Forces’ Surviving in the Cracks
In the field of military embedded computers, Zhimingda faces a dual attack from the ‘national team’ and ‘private enterprise army’. State-owned enterprises such as China Electronics Technology Group and China Aerospace Science and Technology Corporation occupy over 70% of the market share, while private companies like Leike Defense and Jingjia Micro are eyeing niche markets. This ‘sandwich’ structure forces Zhimingda to carve out a differentiated path.
At the 2024 Zhuhai Airshow, Zhimingda’s showcased airborne computer attracted industry attention. This device, only the size of an A4 sheet, can operate stably in extreme environments from -55℃ to +85℃, with technical specifications even surpassing some imported products. However, in the airborne field, the company still faces pressure from established state-owned enterprises like the 58th Research Institute of China Electronics Technology. This strategy of ‘breaking through in airborne systems while maintaining ground systems’ reminds me of the tactical logic of the German ‘Blitzkrieg’ in World War II.
Moreover, cross-industry competition is a growing concern. Huawei’s ‘Kunpeng’ computing ecosystem is penetrating the military sector. Although it currently focuses mainly on the civilian market, its technological reserves and ecosystem integration capabilities may pose a threat to Zhimingda within the next five years. This brings to mind the case of Kodak film being disrupted by digital cameras — the speed of technological iteration far exceeds industry expectations.
3. Technological Innovation: Left Hand AI, Right Hand Localization
In Zhimingda’s new factory in Chengdu’s Qingyang District, the company is testing an intelligent optoelectronic processing module based on the Ascend 910B chip. This module can complete target recognition of infrared images within 0.1 seconds, improving efficiency by 20 times compared to traditional products. This reminds me of the ‘Tianshu’ AI processing platform developed in 2023, which achieved a 99.7% recognition accuracy in drone navigation systems.
However, behind technological innovation lies significant investment. In 2024, the company’s R&D investment accounted for 22.61%, an increase of 4 percentage points year-on-year, but the number of R&D personnel decreased by 23. This ‘quality improvement and efficiency enhancement’ strategy reminds me of Toyota’s ‘lean production’ model. However, in the field of AI algorithms, the company still relies on third-party open-source frameworks, which may become a future technological shortcoming.
Localization is another key battleground. Zhimingda’s products are fully compatible with domestic CPUs such as Feiteng and Longxin, and in 2024, it completed whole machine verification based on the Kirin operating system. This ‘full-stack localization’ capability allowed it to defeat three state-owned enterprises in a key model project tender in 2024. However, for core components like FPGAs, it still relies on imported brands like Xilinx and Altera, which may become a supply chain risk point in the context of Sino-U.S. technological competition.
4. Financial Health: The Hidden Worries Behind Cash Flow ‘Reversal’
The 2024 financial report data surprised me: revenue of 438 million yuan, a year-on-year decrease of 33.95%; net profit of 19.45 million yuan, a year-on-year decrease of 79.79%. However, operating cash flow surged from -5.88 million yuan to 61.58 million yuan, a phenomenon of ‘increased revenue without increased profit’ that is not uncommon in military enterprises.
In-depth analysis reveals that the company’s accounts receivable turnover days shortened from 180 days to 120 days, thanks to the optimization of the military settlement cycle. However, inventory turnover days extended from 90 days to 150 days, which may indicate that some orders have been delayed. More concerning is that the company’s gross profit margin fell from 55% to 48%, which may be related to intensified price competition.
Nevertheless, there are also highlights behind these data. In the fourth quarter of 2024, revenue reached 229 million yuan, a quarter-on-quarter increase of 366%, indicating that orders were concentrated for delivery at the end of the year. This reminds me of the ‘delivery cycle’ pattern in the military industry: due to the characteristics of military budget execution, companies often sprint for performance in the fourth quarter. However, this seasonal fluctuation also brings difficulties in forecasting for investors.
5. Future Strategy: Finding ‘Blue Ocean’ in the ‘Red Sea’
In its strategic plan for 2025, Zhimingda proposed a layout of ‘one core and two wings’: focusing on embedded computers as the core, while expanding into smart munitions and commercial aerospace. This ‘vertical deepening + horizontal expansion’ strategy reminds me of DJI’s extension from drones to agriculture and inspection fields.
In the smart munitions field, the company has collaborated with a military industrial group to develop a ‘drone command system’ that can simultaneously control 100 drones for swarm operations, achieving internationally leading technical specifications. In commercial aerospace, the company provided onboard computers for a satellite project, which successfully completed space environment testing in 2024.
However, there are risks in executing this strategy. The smart munitions field faces competition from giants like Hengtong Infrared and Northern Navigation, while commercial aerospace requires substantial upfront investment. More critically, the company’s operating cash flow in 2024 was only 61.58 million yuan, yet it plans to invest 200 million yuan in capacity expansion, which may lead to an increase in the debt ratio.
6. Market Expectations: ‘Value Reassessment’ Amid Institutional Discrepancies
In 2024, 95 institutions held 12.45% of Zhimingda’s shares, but there was a net reduction of 4.3 million shares throughout the year. This ‘selling more as the price drops’ phenomenon contrasts with the company’s fundamentals. However, in a March 2025 survey, 23 institutions collectively visited, indicating market attention to its new strategy.
The discrepancies in brokerage research reports are even more pronounced. CITIC Securities maintains a ‘buy’ rating, believing that its airborne business will explode; while China International Capital Corporation lowered its target price, pointing out the risk of declining gross profit margins. This divergence reminds me of CATL in 2018: at that time, the market had serious disagreements about its technological route, but it ultimately achieved a trillion-dollar market value.
The current stock price of 39.62 yuan corresponds to a PE ratio of 114, far exceeding the industry average of 50. This valuation level reflects the market’s recognition of its ‘technological scarcity’. However, in my view, this valuation needs performance growth to digest — if net profit in 2025 cannot recover to over 50 million yuan, the stock price may face downward pressure.
7. Three Key Historical Moments
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2002: A 7-Person Startup Team Begins Its JourneyIn this year, Jiang Hu led six technical backbones to rent a 200-square-meter office in Chengdu High-tech Zone. At that time, the military electronics market was almost monopolized by state-owned enterprises. This ‘Xiaomi plus rifle’ entrepreneurial history laid the foundation for the company’s ‘customer demand-oriented’ gene.
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2017: Breaking Through the Technical Bottleneck of Airborne ComputersAfter five years of R&D, Zhimingda successfully provided embedded computer modules for a new type of fighter jet. The reliability index of this product reached an MTBF (Mean Time Between Failures) of 100,000 hours, breaking the foreign technology blockade.
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2021: Listing on the Sci-Tech Innovation Board Reshapes the Industry LandscapeOn the first day of listing, the stock price surged by 120%, raising 3.8 billion yuan. This not only alleviated financial pressure but also made this little-known private enterprise a ‘catfish’ in the military electronics field.
8. Social Responsibility: The ‘Invisible Contribution’ of Military Enterprises
In the 2024 social responsibility report, Zhimingda disclosed three sets of data:
- Cumulative tax payments exceeded 500 million yuan, equivalent to the annual tax amount of 100 small and micro enterprises in Chengdu’s Qingyang District
- R&D investment ratio has exceeded 20% for five consecutive years, with a cumulative training of over 1,200 technical talents
- Donated 2 million yuan in educational funds to Liangshan Yi Autonomous Prefecture in Sichuan
These data make me re-understand the social value of military enterprises. They do not directly serve ordinary consumers like consumer electronics companies, but play an irreplaceable role in national defense modernization.
Disclaimer
This article is a personal diary and does not constitute investment advice. All views expressed in this article are solely my personal stance and do not have any guiding effect.