\u3000\u3000 Shenzhen Transsion Holdings Co.Ltd(688036) (688036)
Main points:
It has cultivated emerging markets for more than ten years and is the "King" of African mobile phone market.
At the beginning of its establishment, the company has been engaged in the mobile phone industry in the African market and cultivated emerging markets for more than ten years. At present, the company has three mobile phone brands: Tecno, itel and infinix. Its sales areas are concentrated in emerging market countries such as Africa, South Asia, Southeast Asia, the Middle East and South America. In 2020, the company shipped 174 million mobile phones, with a global share of 10.6%, ranking fourth. Among them, the market share of Africa remained the first all year round, and the share of smart phones exceeded 40%, which is known as the "king of Africa" in the industry. Based on the advantages in the field of mobile phones, the company has horizontally expanded the hardware product matrix, created 3C accessories brand and home appliance brand, and carried out mobile Internet business based on its own intelligent terminal operating system, voice OS.
Mobile phone business: emerging markets are still growing, based on Africa and entering South and Southeast Asia.
Adhering to the strategy of localization and innovation, the company has created the success of the African market, ranking first in market share all year round. There is still room for further expansion of the advantages of the African market. At present, the penetration rate of intelligent machines in Africa is far lower than the global level. With the upgrading of communication infrastructure, the proportion of intelligent machines in the African market will gradually increase, and the proportion of intelligent machines ASP is about 7 times that of functional machines. The improvement of ASP will be the main driving force for the growth of the African market. In addition to the African market, the company has entered South and Southeast Asian markets such as India, Bangladesh, Pakistan and the Philippines. Mobile phone shipments in emerging markets will continue to grow in the future. The successful experience of Africa is expected to expand to other regions. At the same time, the company has built a brand moat in an all-round way in the continuous deepening of after-sales service, distribution channels and supply chain.
Other businesses: carry out mobile Internet business vertically and expand hardware categories horizontally.
The leading advantage of mobile phone business in Africa and other markets brings natural, sustainable and stable traffic, which has become a strong guarantee for the development of mobile Internet business. The company's mobile phones are equipped with voice OS. It has developed a series of tool applications around voice OS and cooperated with leading Internet enterprises. At present, it has eight applications with more than 10 million monthly live users, creating a high-flow software product matrix. The growth of voice mobile Internet ranks first in Africa, opening up the company's long-term growth space. On the hardware side, the company established home appliance brand syinix and digital accessories brand oraimo, and completed the multi category layout of consumer electronic terminals with the help of good brand image and reputation of mobile phones. At this point, the company has formed its own ecosystem at the software and hardware level, and gradually improved the business layout of "mobile phone + Mobile Internet plus home appliances, digital accessories".
Investment advice
We expect the net profit attributable to the parent company to be RMB 3.66 billion, RMB 4.70 billion and RMB 6.01 billion from 2021 to 2023, with corresponding P / E ratios of 28.4x, 22.1x and 17.3x. The company is given a "buy" rating for the first time.
Risk tips
Overseas business risks; Exchange rate fluctuation risk; Risk of ineffective expansion of emerging markets; Competition increases risk.
