\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 96 Thunder Software Technology Co.Ltd(300496) )
Event: the company released its annual report for 21 years. In the whole year of 21 years, the company achieved a revenue of 4.127 billion yuan, a year-on-year increase of 57.0%. The net profit attributable to the parent company / net profit deducted from non attributable to the parent company was 647 / 576 million yuan, with a year-on-year increase of 46.0% / 57.3%. Q4 alone achieved a revenue of 1.455 billion yuan, a year-on-year increase of 73.0%, and a net profit attributable to its parent company of 197 million yuan, a year-on-year increase of 30.0%. Its revenue and profit performance met market expectations. In addition, the company plans to increase 3.1 billion yuan, increase the research and development of underlying technology, and actively grasp the opportunities in emerging fields such as edge computing / XR.
The growth rate of each business segment was bright, and the performance of mobile phone business and aiot exceeded expectations. In the whole year, the company's mobile phone / car / IOT revenue was about 1.631/12.24/1.272 billion respectively, with a year-on-year increase of about 40% / 59% / 83% respectively. The revenue of Q4 alone was about 576 / 443 / 446 million respectively, with a year-on-year increase of about 80% / 54% / 91% respectively. The growth rate of the three sectors is bright. Among them, the mobile phone business mainly benefited from the continuous high growth of revenue from terminal manufacturers (1.054 billion in 21 years, year-on-year + 48%) Siasun Robot&Automation Co.Ltd(300024) , XR and other major downstream high boom, plus the company's transformation from a simple SOM manufacturer to an "end edge cloud" integrated full scene IOT overall solution provider, which helps the company's IOT business expand rapidly. On the automotive business side, with the gradual landing of medium and high-end models equipped with Qualcomm 8155 and the accelerated promotion of Qualcomm 8295 platforms and models, the company's cabin business has remained strong for 22 years. In addition, Chuangda, as an important link to make up for the short board of the tool chain in the field of Qualcomm's intelligent driving, will gradually realize its business potential with the steady progress of multiple designated projects (GM, great wall and BMW) on Qualcomm ride platform.
The short-term pressure on gross profit is mainly due to the adjustment of income structure and the unsatisfactory operating cash flow, which is mainly due to the long collection cycle of IOT head customers. In the whole year, the gross profit margin of the company was 39.4%, year-on-year -5pcts, and the gross profit margin of Q4 alone was 35.1%. Compared with the gross profit margin of 41.8% in the previous three quarters, the gross profit margin also decreased significantly, mainly due to the adjustment of income structure caused by the high increase of Q4 of IOT business and the decline of gross profit of the business sector affected by exchange rate fluctuations. In 21 years, the company's IOT business revenue accounted for about 30.8% (year-on-year + 4.4pcts), and the gross profit margin of the company's commodity sales and other businesses in 21 years was about 14.5%, year-on-year -8.4pcts, reflecting the decline in the gross profit level of IOT business (commodity sales is the main business model of IOT business). The main reason is that as a global manufacturer, Chuangda's IOT business accounts for a large proportion of the income of foreign customers from Europe, America, Japan and South Korea. According to the disclosure of the company's performance exchange meeting, the exchange rate fluctuations of foreign currencies such as US $21q4 and Japanese yen have led to the loss of the company's income of about 100 million and the impact on the profit of about 40 million. When added back, the gross profit margin of IOT business after restoration is close to 20 years. In terms of operating cash flow, the net cash flow of the company's operating activities in the whole year of 21 / 21q4 was 139 million / 326 million respectively, which was lower than the market expectation, mainly due to the large shipment volume of Q4, the leading customer of IOT, the large scale of accounts (about 155 million accounts receivable), the long accounting period (about 60 days), the upstream payment cycle of the company was about 30 days, and the advance caused by term mismatch affected the cash flow to a certain extent. In addition, in order to cope with the supply chain risk and strong downstream demand caused by the lack of core in the upstream of IOT, the company has increased the inventory scale and personnel reserve. In the 21st century, the inventory increased by 310 million (about 170 million increase in raw materials) and the annual personnel growth rate was 55%, which had a certain negative impact on the cash flow situation, but also laid a foundation for the stability and long-term development of the company's business.
The high capitalization rate of R & D investment reflects the smooth productization process of the company's early raised investment projects. In the past 21 years, the capitalization amount of the company's R & D investment was about 313 million, and the capitalization rate of R & D investment was about 37.9%, a year-on-year increase of + 22pcts. This is mainly due to the smooth progress of the platform / product of multiple fixed raising and investment projects in 2020, including the R & D of intelligent networked vehicle operating system and the R & D of 5g intelligent terminal certification platform (the development expenditure of 225 million in 21 years), and the phased confirmation of the transformation of technical achievements.
In the past 22 years, the fund-raising investment project has made great efforts in the research and development of underlying technology, overweight layout and edge computing / XR. The company announced that it plans to increase no more than 3.1 billion for R & D projects of vehicle operating system (650 million), R & D and industrialization projects of edge computing station (1.005 billion), R & D and industrialization projects of extended reality (XR) (360 million), R & D projects of distributed computing network technology (185 million) and supplementary working capital (900 million). The business model that Chuangda has always adhered to is to study and judge the technical route and industrial development trend, forward-looking layout of cutting-edge emerging fields, take the lead in competitors, realize globalization and product implementation. In addition to continuing to make efforts to build the customization capacity of the underlying operating system of intelligent vehicles, and actively respond to the high-speed iteration of chip platform and the upcoming era of cross domain integration of vehicle EE architecture, Chuangda overweight layout edge computing and extended reality (XR) R & D is expected to continue to benefit from the high prosperity of the two emerging fields.
Firmly optimistic about the high growth and operation quality of the company's business, and maintain the buy rating. We believe that the company's technical advantages of the whole stack, the strategic advantages of the ecological card position of the industrial chain and the fundamentals of high prosperity in the upstream and downstream of the service fields have not changed, and the short-term gross profit margin and cash flow fluctuation will not change the company's long-term good business quality. It is estimated that the company will achieve a revenue of RMB 6.040/87.51/12.189 billion, a net profit attributable to the parent company of RMB 9.56/13.43/1.823 billion and an EPS of RMB 2.25/3.16/4.29 from 22 to 24. The company will be given a target PE of 85-90x in 2022, with a corresponding target price of RMB 191.18-202.42, maintaining a "buy" rating.
Risk warning: the lack of core in downstream industries intensifies; The development process of intelligent cockpit business customers is less than expected; The fixed point of intelligent driving business and the progress of project implementation are not as expected; The prosperity of the Internet of things market is down.
