\u3000\u3000 Zhongji Innolight Co.Ltd(300308) (300308)
Event: on January 27, the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will be RMB 800 ~ 940 million in 2021, with a year-on-year increase of - 7.57% ~ 8.61%, and the deduction of non net profit will be RMB 670 ~ 790 million, with a year-on-year increase of - 12.35% ~ 3.35%.
The performance of 2021q4 has recovered significantly, and the increase in the proportion of high-speed optical modules is expected to drive the gross profit margin upward. In terms of revenue, according to the performance forecast, the company's sales revenue in 2021 increased compared with the same period last year, and the sales revenue increased significantly quarter on quarter. Among them, the shipment of 400g high-end products continued to grow, accounting for the primary sales share. In terms of gross profit margin, affected by the consolidated statement of Chengdu Chuhan, the gross profit margin of the company in the first half of 2021 was 24.4%, a year-on-year decrease of 0.9%. At present, only a few manufacturers in the world have the ability to supply 400g optical modules in large quantities, resulting in a gross profit margin significantly higher than 100g optical modules. As the demand for 400g in the overseas digital communication market gradually dominates, we expect the company's gross profit margin to continue to improve. According to the performance forecast, the gross profit margin of the company in 2021 is higher than that in 2020. In terms of net profit, according to the calculation of performance forecast, the net profit attributable to the parent company is expected to reach 240 ~ 380 million yuan in 2021q4, with a month on month increase of 9.59% ~ 73.52%, which is significantly recovered compared with Q3; In 2021q4, the deduction of non net profit was 159 ~ 279 million yuan, with a month on month increase of - 21.67% ~ 37.44%.
It is expected that the capital expenditure of head cloud manufacturers will enter the expansion cycle in 2022, and the company is expected to continue to benefit as a global leader in data communication optical modules. Driven by the growth of global traffic, data center customers outside China continue to increase capital expenditure and accelerate the deployment of high-end optical modules such as 400g and 200g. The company has strong order demand. The company is fully deploying production resources and actively doing a good job in supply chain management to meet the order demand of customers to the greatest extent. According to the prediction of Dell'Oro group, the global data center capital expenditure will increase by 17% year-on-year in 2022. It is expected that the data center capital expenditure of the top four cloud service providers Amazon, Google, meta and Microsoft will exceed US $20 billion. According to meta's third quarter performance press conference, the company's capital expenditure is expected to be about 19 billion US dollars in 2021 and 29-34 billion US dollars in 2022, with a year-on-year increase of 50% - 70%, mainly investing in data centers, servers, network infrastructure and office facilities. At present, the demand for 200g / 400g high-speed optical modules driven by large data centers is rapidly released. The development of metauniverse will further increase the demand for cloud computing and big data, which will further promote the optical module market to move towards high-speed and high-end optical modules. As the leader of global digital communication optical modules, the company is expected to continue to benefit.
Fixed growth will be implemented to further expand production capacity, and enable high-end optical modules to accelerate growth. According to the report on the issuance of shares to specific objects disclosed in October 2021, the company raised 2.699 billion yuan for the construction project of Suzhou xuchuang optical module business headquarters and R & D center, Suzhou xuchuang high-end optical module production base project, Tongling xuchuang high-end optical module production base project, Chengdu Chuhan production base technological transformation project Replenish working capital and repay bank loans. According to the non-public offering registration draft, the construction period of the project is three years. After the project is completed, the company will increase the production capacity of 1.75 million high-end optical modules and 9.2 million high-end optoelectronic devices for access network every year. Among them, the production capacity of high-end optical modules is expected to increase by 14.42% compared with 2020, The production capacity of high-end optoelectronic devices for access network is expected to increase by 31.73% compared with that in 2020. The company's first mover advantage in high-end optical modules will be further consolidated and its market competitiveness will continue to increase.
Investment suggestion: the company's optical module capacity continues to expand, while strengthening the R & D capacity of relevant modules and 800g modules. With the continuous acceleration of data center network construction, the market share of the company, as a global leading enterprise of data communication optical module, is expected to further rise. We expect the company's revenue in 2021 / 22 / 23 to be RMB 8.045/100.16/12.144 billion; The estimated net profit is 884 / 1249 / 1496 million yuan and EPS is 1.11/1.56/1.87. 30 times PE in 2022, corresponding to the target price of 46.8 yuan. Maintain the "Buy-A" investment rating.
Risk warning: overseas demand is less than expected, market competition intensifies, raw material price fluctuation risk, and production expansion process is less than expected
