\u3000\u3000 Zhongji Innolight Co.Ltd(300308) (300308)
Event overview: on January 26, 2022, the company released the performance forecast for 2021. It is expected that the net profit attributable to the parent company will be RMB 800 ~ 940 million, with a year-on-year change of - 7.6% ~ 8.6%. The net profit attributable to the parent company of Q4 is expected to be 240 ~ 380 million yuan, with a year-on-year change of - 9.7% ~ 43.0%. It is estimated that the net profit deducted from non parent company is 670 ~ 790 million yuan, with a year-on-year change of - 12.4% ~ 3.4%.
The performance exceeded the market expectation, and the 21q4 performance improved significantly month on month: according to the performance forecast, the net profit attributable to the parent company in 2021 is expected to be 800 ~ 940 million yuan, with a year-on-year change of - 7.6% ~ 8.6%. 21q4's performance improved significantly month on month, reaching 9.4% ~ 73.3%, exceeding market expectations. The high-end optical module represented by 400g is the core driver of performance growth. On the other hand, the increase of equity incentive expenses, the decrease of confirmed investment and government subsidies, and the transfer of shares of the subsidiary Zhongji intelligent also reduced the growth rate of net profit attributable to the parent company to a certain extent.
The boom continued to pick up, and the digital communication optical module industry accelerated into the upward cycle: since 21q2, the demand of the digital communication optical module industry has picked up significantly, and the industry leader has accelerated the recovery. Taking Zhongji Innolight Co.Ltd(300308) as an example, the performance of 21q4 is expected to achieve double growth year-on-year and month on month. Looking ahead, metauniverse is the world's largest application scenario and traffic consumer in the next few years. With the official announcement of entering the cloud universe by meta and Microsoft, the cloud giants are expected to open a new round of capital expenditure competition on the infrastructure side. Meta disclosed that capex will increase to 29-34 billion yuan in 2022, an increase of more than 50% compared with 2021. In this context, the upstream digital communication optical module industry is expected to accelerate into a new round of boom upward cycle.
Constant increase and expansion of production and continuous consolidation of leading advantages in the field of digital communication optical modules: in 2021, the company launched the constant increase project, raising an amount of about 2.7 billion yuan, which is used to increase the annual production capacity of 1.75 million high-end optical communication modules and 9.2 million high-end optoelectronic devices for access network. It is expected to reach the production capacity from 2023 to 2024. At that time, the large-scale delivery capacity of the company's optical module products will be consolidated and strengthened, which will help further consolidate the company's leading advantage in the field of digital communication optical modules.
Investment suggestion: we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 817 / 1146 / 1530 million respectively, and the corresponding PE multiple is 36x / 26x / 19x. The company is the leader of digital communication optical modules. It leads the overall market share of high-end optical modules represented by 200g and 400g, and will fully benefit from the demand of downstream cloud giants. At the same time, the company has obvious first mover advantages in the field of 800g optical modules, and is expected to enjoy the dividend in the window period of technological change. Maintain a "recommended" rating.
Risk tip: the demand for optical modules of cloud computing giants is lower than expected, the industry competition intensifies, and the price of optical modules decreases too much
