\u3000\u3000 Eoptolink Technology Inc.Ltd(300502) (300502)
Event overview: on January 24, 2022, the company released the performance forecast for 2021. It is expected that the net profit attributable to the parent company will be 640 ~ 680 million yuan, with a year-on-year increase of 30.15% ~ 38.28%. The net profit attributable to the parent company of Q4 is expected to be 175 ~ 215 million yuan, with a year-on-year increase of 16.82% ~ 43.51%. It is estimated that the net profit deducted from non parent company is 578 ~ 618 million yuan, with a year-on-year increase of 26.01% ~ 34.73%.
The performance growth rate is obvious, and 21q4 has improved significantly month on month: according to the performance forecast, the net profit attributable to the parent company in 2021 is expected to be 640 ~ 680 million yuan, with a year-on-year increase of 30.15% ~ 38.28%, of which 21q4’s performance has improved significantly month on month, reaching 23.45 ~ 51.65%. Throughout the year, the performance growth mainly benefited from the continuous growth of data center market demand outside China and the continuous and stable cooperation with customers in the telecom market.
The demand of downstream cloud giants has been boosted, and the prosperity of the industry has accelerated into the upward cycle: since 21q2, the demand of the data communication optical module industry has warmed up significantly, and the performance growth of the leading enterprises in the industry represented by Eoptolink Technology Inc.Ltd(300502) has increased significantly. With the official opening of the grand curtain of metauniverse, considering its requirements for large computing power and high traffic, the cloud giant is expected to open a new round of capital expenditure competition on the infrastructure side. Meta, Microsoft and NVIDIA have officially announced their entry into the cloud universe. Meta disclosed that capex will increase to 29-34 billion yuan in 2022, an increase of more than 50% compared with the same period in 2021. With the help of the spring tide of cloud universe development, the upstream digital communication optical module industry is expected to accelerate into a new round of boom upward cycle.
Improve the layout of silicon optics and further consolidate its own technical advantages: the company issued the announcement on the acquisition of equity of overseas joint-stock companies on August 25, 2021, and plans to acquire the remaining shares of Alpine optoelectronics, Inc., an overseas joint-stock company with its own funds. On January 18, 2022, the acquisition passed the review of the Committee on foreign investment in the United States (CFIUS). Alpine has a self-developed ncp4 ™ Silicon photonic technology platform can provide single wavelength 100g optical solution, DWDM, CWDM and lan-wdm connection scheme, which can be applied to high-speed 40km DCI and high-density data center interconnection. The acquisition will help the company improve its layout in silicon light, related optical modules and other fields, and further consolidate its own technical advantages.
Investment suggestion: we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 659 / 818 / 1054 million respectively, and the corresponding PE multiple is 27x / 22x / 17x. As the leading enterprise in the field of optical modules, the company will fully benefit from the large demand in the data communication market and telecom market. At the same time, with the accelerated layout in silicon light, 800g and other fields, it is expected to further open the space for future growth. 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
