\u3000\u3000 Quectel Wireless Solutions Co.Ltd(603236) (603236)
Key elements of the report:
The company's annual operating revenue in 2021 was about 11 billion yuan, with a year-on-year increase of about 80.16%; The net profit attributable to the shareholders of the listed company was about 350 million yuan, with a year-on-year increase of about 85.17%; The net profit excluding non recurring profit and loss was about 328 million yuan, with a year-on-year increase of about 92.86%, which was basically in line with expectations.
Key investment points:
The performance was in line with expectations, and the revenue of Q4 reached a new high in a single quarter. Compared with 2020, the company's sales revenue in vehicle, intelligent security, gateway, wireless payment, laptop and other fields increased significantly in 2021. In a single quarter, the company expects to achieve a revenue of about 3.524 billion yuan (YoY + 85.69%, QoQ + 11.50%) and a net profit attributable to the parent company of about 113 million yuan (YoY + 76.66%, QoQ + 9.32%). The revenue and net profit of 2021q4 reached a new high in the single quarter since the establishment of the company. The main reason why the profit growth rate was lower than the revenue growth rate was the increase in expenses caused by Q4's withdrawal of bonuses. At the same time, from the performance of the company in the first three quarters, it can be seen that the scale effect of the company is gradually reflected while the revenue is growing rapidly, and the rate of R & D and management expenses began to decline slightly year-on-year. We believe that with the further expansion of the company's channels and the growth of 5g product shipments with high gross profit, the company's gross profit margin and net profit margin are expected to continue to rise.
5g brings greater demand to the Internet of things market. According to the monitoring data of counterpoint, nbiot has basically formed a stable contribution, and has maintained one-third of the market share of the whole cellular Internet of things since the first quarter. It is worth mentioning that after the year-on-year growth rate of 5g module reached 800% in the second quarter, it still continued the trend of high growth in the third quarter, with a growth rate of 700%. On the one hand, in the short term, it mainly depends on the further maturity of 5g applications based on the Chinese market; On the other hand, in the long run, it is also in line with the objective development trend of the standard structure of the Internet of things in the future. By 2023, the number of global networking terminals will exceed 43 billion, and these networking terminals will exist in different connection structures. With 2G / 3G network withdrawal, Nb IOT, 4G, 5g and other cellular IOT systems will play an important role. In China, the demand growth is expected to maintain a high growth rate as operators increase 5g network layout and the price drop caused by the mass production of 5g modules. The company is deeply engaged in the field of Internet of things modules, and has deep technology and product reserves in modules of various systems. At present, the company has about 30 5g modules, which support terminal development and commercial use by more than 1000 customers around the world. Customers can freely choose combinations according to their own needs. 5g module has higher value than other modules. Therefore, relevant 5g module businesses such as Internet of vehicles and cellular notebook module are expected to contribute more performance increment to the company in 2022.
Profit forecast and investment suggestions: as a leading enterprise of the Internet of things module, the company has obvious advantages in the fields of scale, R & D, supply chain and sales channels. In the future, it will continue to fully enjoy the revenue growth dividend brought by the rapid outbreak of the downstream market of the Internet of things. It is expected that the growth rate in the second half of the year will still maintain a high growth trend. It is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 11.028/15.537/20.455 billion respectively, the net profit attributable to the parent company will be RMB 3.51/6.42/1.029 billion respectively, the EPS will be RMB 2.42/4.42/7.08 respectively, and the closing price of PE on February 7 will be 76x / 42x / 26x, maintaining the "buy" rating.
Risk factors: upstream raw material price fluctuation, intensified market competition and exchange rate fluctuation risk.
