Meig Smart Technology Co.Ltd(002881) (002881)
Event: the company released the third quarterly report of 2021. In the first three quarters, the revenue was 1.321 billion yuan (YoY + 91.69%), the net profit attributable to the parent company was 80 million yuan (YoY + 545.46%), and the EPS was 0.44 yuan / share (YoY + 143.01).
The market expanded rapidly and customer orders surged. In the first three quarters of 2021, the company realized an operating revenue of 1.321 billion yuan (YoY + 91.69%), and a net profit attributable to the parent company of 80 million yuan (YoY + 545.46%).
The rapid growth of revenue and net profit is mainly due to: ① the continuous improvement of the company’s product popularity and industry status, and the increasing trust of Internet of things end customers in MEG brand modules.; ② The depth and breadth of Internet of things applications continue to expand, and the demand for wireless communication modules continues to expand; ③ The company seized the market opportunity in the 4G \ 5gfwa field, and the shipment of intelligent terminal products represented by FWA products increased significantly compared with the same period last year.
Q3 gross profit margin decreased slightly to 19.38%, down 2.47 percentage points year-on-year. Main reasons: 1. The price of electronic raw materials such as chips and passive devices increases; 2. The company has provided competitive market prices when expanding the market scale, especially the overseas market scale; 3. The sales end transmits the lag of price increase to customers.
The R & D investment is expanded, and the products are favored by the market. In 2021q3, the company’s R & D expenditure was RMB 115 million, with a year-on-year increase of 37.42%. The company increased R & D investment, promoted product upgrading, seized the market opportunities in the 4G \ 5gfwa field, and the shipment of intelligent terminal products represented by FWA products increased significantly compared with the same period last year.
The cellular Internet of things module industry is booming, and the company’s 5g module and Internet of things technology are leading. 5g and Internet of things business applications have expanded, and the global demand has increased rapidly. The company is deeply engaged in the field of 5g modules, and its products have wide application space in VR / AR, intelligent networking, AI, cloud computing, edge computing and other fields. In Q3 of 2021, the company won the 5g module bidding projects of China Mobile and China Unicom respectively, which was recognized by the market.
According to the latest statistics of counterpoint, by 2021q3, the global shipments of cellular Internet of things modules had increased by 70% year-on-year, and the overall revenue had exceeded the US $1.5 billion mark. Due to the low base, 5g module shipments increased by 700% year-on-year. In the global cellular Internet of things module market, the top five module manufacturers are all from China. Meig Smart Technology Co.Ltd(002881) ranked fifth with a share of 5.4%.
The shipment of Internet of vehicles modules has increased rapidly, benefiting from the intelligence of vehicles. The company’s standard data transmission module has been widely used in traditional vehicle product fields such as Tbox, and the company’s intelligent module products are widely used in auxiliary driving fields such as intelligent cockpit, ADAS \ DMS, etc. The company’s 5g intelligent module products have been mass produced and shipped to China’s leading new energy vehicle enterprises and applied to the intelligent cockpit system. With the continuous penetration of Android operating system into the vehicle field and the continuous development of the trend of one core multi screen and multi-channel camera access in the intelligent cabin, it is expected that the company’s intelligent module products will usher in a broad market space. The company’s intelligent module has many advantages, such as pluggable and fast matching, fast product iteration speed, stronger adaptability of Android system software, cost and so on.
Investment suggestion: the company focuses on wireless communication modules and solutions, and is committed to various types of wireless communication modules, Internet of things solutions, 4G \ 5gfwa fixed wireless access equipment and related technology development services. We are optimistic about the sustained high prosperity of the Internet of things industry, the obvious competitive advantage of the company, and the module shipment is expected to grow rapidly. At the same time, the company is optimistic about the rapid growth of the company’s Internet of vehicles module business. It is predicted that the company’s revenue from 2021 to 2023 will be 1.9 billion, 2.83 billion and 3.95 billion respectively, and the net profit attributable to the parent company will be 119 million, 198 million and 289 million respectively, corresponding to PE 67 / 40 / 28 / respectively. It will be covered for the first time and given a “buy” rating.
Risk tip: the development of Internet of things industry is not as expected; The continuous price rise of raw materials leads to the gross profit margin lower than expected; The customer development progress of the Internet of vehicles module is less than expected.
