\u3000\u3000 Zhongji Innolight Co.Ltd(300308) (300308)
Events
The company released the performance forecast for 2021. It is expected to realize a net profit attributable to the parent company of RMB 800-940 million in 2021, with a year-on-year increase of - 7.57% - + 8.61%; Deduct non net profit of 670-790 million yuan, with a year-on-year increase of - 12.35% - + 3.35%. In the fourth quarter of 2021, the net profit attributable to the parent company in a single quarter was 240-380 million yuan, an increase of 9% - 73% month on month and - 10% - 43% year-on-year.
Our comments are as follows:
The quarterly performance continues to improve, and short-term factors have a certain impact on the current performance.
From a quarterly perspective, the company's net profit attributable to the parent company continued to increase quarter by quarter in 2021. Overall, in 2021, 1) the company's revenue continued to grow year-on-year, and the sales revenue increased significantly quarter on quarter; 2) High end 400g and other products have become the primary source of revenue of the company. The optimization of product structure, cost reduction and efficiency increase have promoted the overall gross profit margin to increase quarter by quarter, and the annual gross profit margin has also increased year-on-year.
However, in 2021, 1) the equity incentive fee will affect the profit by about 57 million yuan; 2) Investment income and government subsidies decreased by about 74 million yuan year-on-year; 3) The performance and share transfer of Zhongji intelligent, a wholly-owned subsidiary, reduced the company's consolidated profit by about 20 million yuan. The above short-term events have a certain impact on the annual performance of 21 years, and these impacts are expected to gradually weaken in the future.
Looking forward to the future, traffic growth drives data center customers to continue to increase capital expenditure investment, and the demand for high-end optical modules is expected to continue to grow.
According to Google's latest data, among its network traffic, traditional server traffic has increased by 40%, machine learning related traffic has increased by 55-60%, and AI related traffic has accounted for more than 50% of the total data center traffic. In the future, with the continuous development of AI, metauniverse and other new technologies, network traffic will maintain long-term growth. As the core bearer of network traffic, cloud manufacturers continue to increase capital expenditure and accelerate the deployment of high-end optical modules such as 200g / 400g. As the global leader in high-end digital communication optical modules, the company has strong demand for orders. In the future, it is expected to focus on benefiting from the continuous growth of industry demand in the long term.
The price reduction factor worried by the market is expected to usher in a significant narrowing stage of price decline in the future, and the demand for high-end optical module products is expected to further exceed expectations.
According to the latest forecast data of lightcounting, the prices of main products of digital communication optical module are relatively stable from 2022 to 2026. Compared with the price reduction of about 40% in some previous years, the comprehensive price reduction of main optical module products in the future is expected to be about 15%. At the same time, lightcounting also raised the market demand forecast of major products such as Facebook 200gfr4 from 2022 to 2023, Chinese cloud manufacturer 200gsr4 and 400gsr8 / DR4. The continuous growth of traffic and the continuous investment of major manufacturers in new technologies such as metauniverse / AI are expected to bring more than expected growth points to the optical module industry.
Investment advice and profit forecast
As the global leader of high-end digital communication optical modules, the company has a clear growth track from 40g to 100g and then to 400g. The advantages of 200g / 400g era company are expected to continue to the next generation of 800g products and continue to lead the development of the industry. Benefiting from the recovery of cloud computing capital expenditure driven by the continuous growth of traffic, as well as the continuous investment in 5g construction in the telecom market and the upgrading of Gigabit broadband, the demand growth / rate upgrading of access network is driven. The growth of the company in 22 years is expected to accelerate. Due to the impact of short-term factors such as equity incentive expenses, the prediction of the company's net profit attributable to the parent company in 21-23 years was adjusted from RMB 1.00, 1.25 and 1.48 billion to RMB 890, 1.17 and 1.44 billion respectively, corresponding to 25 times PE in 22 years and 20 times PE in 23 years, and the "overweight" rating was reiterated.
Risk warning: the downstream demand is lower than expected, the impact of overseas epidemic and supply chain is higher than expected, the market competition is higher than expected, the risk of exchange rate fluctuation, the performance forecast is not audited, and the actual performance is subject to the annual report
