Queclink Wireless Solutions Co.Ltd(300590) (300590)
Event: the company recently announced that the company signed a purchase order with Zhejiang Jinbang on purchasing products and related matters. As of December 16, the company and Zhejiang Jinbang had signed a number of purchase orders for 12 consecutive months, with a total order amount of RMB 277 million (including tax), which has exceeded 50% of the company's audited main business income in 2020.
Our comments are as follows:
Sign major orders for daily operation and continue to expand downstream areas
As of December 16, the company and Zhejiang Jinbang had signed a number of purchase orders for 12 consecutive months, with a total order amount of RMB 277 million (including tax), which has exceeded 50% of the company's audited main business income in 2020. Zhejiang Jinbang's main products are electric recreational vehicles, electric scooters, electric bicycles, etc. (excluding motor vehicles). The company signed a contract with Zhejiang Jinbang, and the product is on-board panel control assembly. We believe that the signing of major daily operation orders by the company marks the company's continuous expansion of downstream fields and is expected to further open up growth space in the future.
Continue to make layout outside China, build reputation, tap the market and accumulate customer resources
1) In the Chinese market, in February 2021, the company won the bid for the procurement project of China Construction Bank Corporation(601939) Internet of things tag reader (fixed and handheld), which also marks that the company has gradually established its own brand awareness in the Chinese market. In the first half of 2021, the Chinese market focused on the market development of micro travel transportation (including electric bicycles and scooters).
2) In the international market, since the cooperation between the company and Lide products, the company has continuously absorbed its process and localized it. It has not only opened up markets including Europe, South America, North America and Africa, but also won the recognition of users by realizing product lightweight, material localization, innovating production process, improving test methods and improving product stability. For animal tracking and traceability products, the company has launched an e-commerce platform. Customers can place orders online, and the system automatically transfers orders to the factory for production, which improves the whole business cycle and effectively reduces the impact of the epidemic on business development. The e-commerce platform has been launched in Australia, Canada and New Zealand. At present, there are about 2000 registered dealers and distributors. The launch of the e-commerce platform will effectively promote the market development of animal traceability products, break the traditional sales model of animal traceability products, and lay a foundation for increasing the company's market share. The company will continue to give full play to Lide's brand advantages and market accumulation. At the same time, relying on the sales channels established by the company in the world, the company will continue to explore the global animal traceability management market.
The industry has broad prospects, continues global layout and can grow in the future
The Internet of things industry is in a vigorous development trend, and the application scenarios are constantly expanded and enriched. According to GSMA statistics and prediction, 4G technology has become the world's mainstream mobile communication technology in 2019, with a total number of connections exceeding 4 billion, accounting for 52%. It is expected that the number of 4G connections will continue to grow, accounting for 60% by 2023. At the same time, 5g technology will develop rapidly, and Internet of things connection will become an important part of 5g era. It is expected that the number of Internet of things connections will reach 25 billion and the income of Internet of things will reach US $1.1 trillion in 2025. The global Internet of things market capacity in 2019 will be USD 343 billion and will increase to USD 1.1 trillion by 2025, of which the revenue of M2M connection market will reach USD 56.2 billion. The company Wuxi Online Offline Communication Information Technology Co.Ltd(300959) is combined to strengthen the corporate brand image. At the same time, through active layout, the global market penetration is expected to increase + multi product expansion, and the company has more room to improve its market share in the future.
Profit forecast and investment suggestions: with the normalization of the epidemic situation, the company's market strategy is adjusted to the combination of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) to strengthen corporate brand publicity. In the medium and long term, with the continuous and rapid growth of the number of Internet of things devices, the company is expected to benefit in the long term. We are optimistic about the company's long-term growth. Considering the appreciation of RMB this year, the tight supply of upstream raw materials and the prospect of continuous breakthroughs in related products such as electric scooters in the future, we adjusted the company's estimated net profit of 170 million, 300 million and 400 million yuan (original value of 180 million, 280 million and 400 million yuan) in 21-23 years, corresponding to 28x PE in 22 years, maintaining the "overweight" rating.
Risk tips: international trade friction and market fluctuation risk, greater risk affected by covid-19 epidemic, less than expected new business expansion, exchange rate fluctuation risk, less than expected order delivery, tight supply of upstream raw materials, etc
