\u3000\u3000 3Onedata Co.Ltd(688618) (688618)
Small and beautiful industrial communication equipment manufacturers, new technologies and new base layout will drive new growth
The company’s main products are industrial Internet communication equipment, including industrial Ethernet switches, embedded modules, equipment networking products and industrial wireless products. The products cover rail transit, electric power, new energy, smart city, intelligent manufacturing and other fields. As a small and beautiful industrial communication equipment supplier, it has a high profit level.
From 2017 to 2021q3, the company’s long-term gross profit margin remained above 60%, and the net profit margin exceeded 25%.
The Chinese brand of the company’s core industrial switch products ranks second, and the Asian market accounts for 3.5%. The company takes the lead in the layout of new technologies such as TSN and 5g, which will benefit from the growth brought by the increase of the value of new technology products. Since 2020, the company has increased investment in R & D expenses, number of employees and fixed assets. After the implementation of the raised investment project in 2022, the production capacity is expected to double, making preparations for the acceleration of performance.
The penetration rate of industrial Internet has increased, and technological upgrading has driven the global market to reach 10 billion US dollars
Industrial communication network is the prerequisite infrastructure for the development of industrial Internet industry, which is expected to accelerate its development under the digital economy plan of the 14th five year plan. In 2021, the scale of global industrial communication market is about 4.14 billion US dollars. The application of 5g and TSN new technologies is expected to push the scale of industrial communication market to 10 billion US dollars in 2025.
The company is mainly oriented to the Chinese market. According to our calculation, during the 14th Five Year Plan period, only the Chinese market space of industrial Ethernet switches reached 14.7 billion yuan. Among them, the market policies such as smart mine, intelligent manufacturing and electric power have strong driving force, the demand for intelligent informatization is clear, and under the background of independent control, domestic manufacturers are expected to fully benefit from the development of the industry.
The competitive advantage in the field of industrial wired communication is remarkable, and it is distributed to platform companies
The company is a leader in the field of industrial Ethernet switches in China. Its main advantages are: compared with local manufacturers, (1) the industry takes the lead in the industry with complete switch product series and indicators, (2) takes the lead in research and development in the next generation technology field such as TSN, and (3) has established strong customer barriers in the deep vertical field. Compared with international manufacturers, (4) the company began to layout to a solution platform company, (5) the response advantage of localized services is significant.
Be optimistic about the industry and competitiveness of the company and give a “buy” rating
The company is faced with good industry development prospects and is expected to achieve rapid growth on the eve of the outbreak of the industrial Internet market and against the background of domestic substitution. We expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 64 / 0.64/0.95 billion. Combined with absolute valuation and relative valuation, we believe that the value of the company’s stock is about 57.0-63.8 yuan, giving a “buy” rating.
Risk warning: market competition intensifies; The progress of R & D projects is not smooth; Upstream supply shortage; Unfavorable market expansion
