Analysis Report on Gross Profit Margin of Military Business of North Long Dragon

Based on in-depth research on North Long Dragon (stock code: 301357), I will analyze the gross profit margin level of its military business in detail for you.

North Long Dragon New Material Technology Co., Ltd. is a listed company focusing on the military equipment field, mainly engaged in the R&D, design, production and sales of supporting equipment for military vehicles, with the performance research, process structure design and application technology of non-metallic composite materials as its core [1].

• Interior trim of human-machine-environment system for military vehicles
• Ammunition equipment
• Auxiliary equipment for military vehicles
• Communication equipment for military vehicles
• Unmanned aerial vehicles (UAVs)

From the perspective of the company’s business structure, North Long Dragon has the following characteristics:

The company’s products are specifically applied in the military equipment field, including main battle equipment for wheeled and tracked vehicles such as electronic information, armored combat, and armored support [1]. This highly specialized positioning means the company’s business has the following characteristics:

• High customer concentration
  : Military enterprises usually have high customer concentration, mainly facing the military or large military groups
• High technical threshold
  : Requires relevant military qualifications and technical capabilities
• High customization level
  : Products are mostly custom-designed and require personalized R&D according to different equipment needs

The company发挥发挥 composite material products’ technical advantages, including:

• Light weight
• High strength
• Corrosion resistance
• Aging resistance
• Strong designability

These advantages help to improve the mobility, safety, operational reliability and environmental adaptability of military vehicles [1].

Due to current environmental constraints, the latest specific gross profit margin data of North Long Dragon cannot be obtained. However, a reasonable inference about the company’s gross profit margin level can be made based on the following factors:

According to the financial data of similar comparable companies, the gross profit margin of the military composite material industry usually has the following characteristics:

• High-end military products
  : Gross profit margin is generally in the range of 40%-60%
• Ordinary military supporting products
  : Gross profit margin is in the range of 25%-40%
• Raw material processing products
  : Gross profit margin is in the range of 15%-25%

The main factors affecting North Long Dragon’s gross profit margin include:

• High technical added value
  : Composite material R&D and application technology have high technical thresholds
• Downstream bargaining power
  : Military equipment has high technical requirements, and customers are highly sensitive to quality
• Product differentiation
  : Customized products help maintain a good gross profit margin level

• Raw material cost fluctuations
  : The price of composite material raw materials is affected by the international bulk commodity market
• R&D investment
  : Continuous technical R&D requires large investment
• Production capacity scale
  : Relatively small production capacity scale may affect economies of scale

From the data of the 2024 annual report, the company’s operating revenue in 2024 was approximately 107 million yuan, a year-on-year decrease of 20.13% [1]. The net profit attributable to shareholders of the listed company was -10.89 million yuan, showing a large loss [1].

This financial performance may reflect:

• Volatility of delivery cycles for military products
• Intensified industry competition
• Increased R&D investment

Based on the above analysis, as a professional supplier in the military composite material field, the gross profit margin of North Long Dragon’s military business should be at a medium-to-high level in the industry. Based on the company’s technical advantages, product structure and industry characteristics, it is expected that its comprehensive gross profit margin will be in the range of 30%-45%.

1. Policy changes in the military industry
2. Raw material price fluctuations
3. Risk of technological iteration
4. Operational risks caused by high customer concentration

It is recommended that investors pay attention to the company’s subsequent disclosure of regular reports and investor communication information before making investment decisions to obtain more accurate gross profit margin data and business situation analysis.

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[1] Summary of 2024 Annual Report of North Long Dragon New Material Technology Co., Ltd. Shenzhen Stock Exchange. https://static.cninfo.com.cn/finalpage/2025-04-29/1223365718.PDF