\u3000\u3000 Suzhou Tfc Optical Communication Co.Ltd(300394) (300394)
Different from the market cognition: the market generally believes that the company’s core competitiveness comes from the “horizontal + vertical” expansion logic. After comparison, we find that the main comparable companies in the industry have relatively similar expansion paths, of which only Suzhou Tfc Optical Communication Co.Ltd(300394) continue to improve their performance and market competitive position. We believe that the core competitiveness of Tianfu is that the company is a scarce platform company with high self-sufficiency rate and leading product iteration speed in the industry.
The self-sufficiency rate of core raw materials is high, and the gross profit margin is far higher than the industry average. The profitability of the company far exceeds that of its peers. The gross profit margin / net profit margin of 2021q1-q3 is 15pcts / 10pcts higher than the industry average, reaching 51% / 28%. The layout of the whole industrial chain of the company and the self-sufficiency rate of core raw materials are high: in horizontal comparison, the proportion of raw material cost in sales of Tianfu in 2020 (30%) is 12 PCTs less than the industry average in 2020 (42%). The cost advantage of the company is prominent, which is the main reason for the high gross profit level. The concept of “ten thousand products into fine products” creates a high rate of good products and a low rate of customer rework, so as to further maintain the high profitability of the company.
The product matrix has been continuously expanded, and the bargaining power of upstream and downstream has been greatly improved. The company’s product matrix has expanded rapidly, from 3 product lines in 2008 to 13 product lines at present, covering all passive optical devices of optical networks and optical modules. It has gradually become a scarce optical device platform company, greatly improving the bargaining power of upstream and downstream. The company has continuously carried out vertical integration of the industrial chain, continuously decreased its dependence on a single supplier, and significantly improved its bargaining power with upstream suppliers; In 2020, the procurement volume of the company’s top five suppliers decreased by 25 PCTs to 34% compared with that in 2015 (69%). Tianfu platform customized service mode provides one-stop service, which can meet the needs of downstream customers in more dimensions; In 2020, the proportion of the company’s sales revenue to the top five customers increased from 36.30% in 2015 to 41.57% in 2020, and the customer stickiness increased significantly. The company’s main customers include a streamer module manufacturer outside China. The customer quality is high, and the key customer model is expected to further improve the company’s profitability.
High R & D investment ensures the rapid iteration of products, and dingzeng enabling company enters the silicon light market. The company pays attention to long-term R & D investment, and the R & D investment / R & D personnel in 2020 are 64% / 70% higher than the industry average respectively; The company has launched 2 + new product lines every year, the product iteration speed is much faster than that of comparable manufacturers, and the high R & D investment ensures the rapid expansion of the company’s product matrix. According to the company’s announcement, Tianfu will add 786 million yuan in 2021 to build a high-speed optical engine packaging platform and lay out the silicon light market. After completion, the annual revenue of the platform will reach 1.044 billion yuan. According to lightcounting, the market share of silicon optical solutions will continue to increase from 2021 to 2026. The global silicon optical market scale will be about US $2 billion in 2020. It is expected that the silicon optical market scale will be close to US $8 billion by 2026. The silicon optical market share is expected to increase from 25% to more than 50%, and the market potential is huge. The company is looking forward to the layout of the silicon optical field, and the advantages of the optical passive field are further extended to the optical active business; In the future, the company is expected to drive the further volume of optical passive components on the basis of the rapid development of optical active business.
Investment suggestion: the company has fast product expansion, outstanding vertical and horizontal integration ability of the industrial chain, high operation efficiency and strong profitability. The high-end silicon optical high-speed optical engine has entered the stage of mass production, and is expected to drive the optical passive business to further expand, with strong certainty of performance growth. The company actively expands the field of non-optical communication, and has broad market space in new fields such as lidar and medical detection, which is expected to further expand the company’s commercial territory. We expect that the company’s revenue from 2021 to 2023 will be RMB 1.05/14.3/1.96 billion respectively, and the net profit will be RMB 3.1/4.2/560 billion respectively, corresponding to EPS of RMB 0.79/1.09/1.43 respectively. Give a “Buy-A” investment rating of 37 times PE in 2022, corresponding to the target price of 40.33 yuan.
Risk tip: the development of high-speed optical engine is less than expected, the chip R & D process is less than expected, the capital expenditure of operators / cloud manufacturers is less than expected, the overseas epidemic prevention and control effect is less than expected, and the industry competition intensifies the risk
