\u3000\u3000 Suzhou Tfc Optical Communication Co.Ltd(300394) (300394)
Event overview: on February 9, 2022, the company released the performance express for 2021, with an estimated revenue of 1.046 billion yuan, a year-on-year increase of 19.75%, of which 21q4 is expected to have a revenue of 280 million yuan, a year-on-year increase of 29.22%. The net profit attributable to the parent company is expected to be 311 million yuan, with a year-on-year increase of 11.48%. The net profit attributable to the parent company in 21q4 is expected to be 98 million yuan, with a year-on-year increase of 51.90% and a month on month increase of 30.67%. It is estimated that the net profit deducted from non parent company is 282 million yuan, with a year-on-year increase of 7.97%.
The company's performance maintained steady growth and showed strong resilience: in 2021, the company actively developed high-quality customers outside China. The demand for optical devices in the data center market built the main driving force for the company's performance growth. Under the condition of relatively low demand in the telecommunications market, the performance showed great resilience, and the revenue and parent net profit still maintained a year-on-year double-digit growth, 19.75% and 11.48% respectively. At the same time, after years of R & D investment, the company's early fund-raising project "high-speed optical engine construction project for 5g and data center" also successfully achieved mass production and began to make a positive contribution to the performance.
The telecom market is expected to pick up, and the demand for digital communication market is expected to accelerate: in the downstream digital communication market, according to the annual report performance recently disclosed by Microsoft, Amazon, meta and Google, the total revenue and net profit of the four q4s were $298.1 billion and $64 billion respectively, with a year-on-year increase of 17.6% and 30.3%. With the official opening of the meta universe curtain, considering its requirements for large computing power and high traffic, the market expects the cloud giant to start a new round of capital expenditure competition on the infrastructure side, and the upstream optical device industry is expected to accelerate into the boom upward cycle. In terms of telecom market demand, since the second half of 2021, it has gradually stepped into the track of recovery.
The core of optical devices is M & A. the company makes full use of the reuse advantages of technology and platform to extend the field of intelligent vehicle across fields: in the development process of the company, endogenous extension is carried out simultaneously, and many successful business expansion and extension have been realized. At present, relying on the optical device R & D platform built for many years, the company makes use of the professional accumulation in many fields such as basic materials and components, optical design and integrated packaging, as well as the complementary advantages formed in optical coating and other fields after the acquisition of Arctic optoelectronics, Further expand to the downstream lidar and medical detection field to provide customers with supporting products (including basic component products and integrated packaging device products). There is a broad market space in relevant fields, especially in the field of intelligent vehicle, and the downstream demand continues to rise.
Investment suggestion: we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 315 / 400 / 515 million respectively, and the corresponding PE multiple is 43x / 34x / 26x. As a scarce one-stop solution provider of platform optical devices in China, the company has strong traditional passive business strength and obvious synergy between active business and passive device business. With the mass production of high-speed optical engine project, the company will further consolidate its competitive advantage, and the new business extension across fields is expected to open up room for the company's growth in the future. Maintain a "recommended" rating.
Risk warning: the demand of downstream telecom market / data communication market is lower than expected, the competition in optical device industry is intensified, and the development of emerging business is lower than expected
