\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Event: on March 8, 2022, the company released the performance express of 2021, realizing a revenue of 11.21 billion yuan, a year-on-year increase of 83.60%; The net profit attributable to the parent company was 351 million yuan, a year-on-year increase of 85.95%; The net profit attributable to the parent company after deduction was RMB 323 million, with a year-on-year increase of 89.76%.
Comments:
The performance is in line with expectations, and the “module supermarket” has broad growth space
According to the company’s announcement, the revenue and net profit attributable to the parent company maintained an increasing trend in 2021, and the performance was in line with expectations. Overall, the main reasons for the company’s good performance are as follows: 1) the company has rich product lines and timely grasp the development trend of the Internet of things industry. The company continues to innovate products, optimize product structure, and form a one-stop solution with cellular communication module, Wi Fi & BT module, GNSS module, antenna, cloud platform, etc. as a “module supermarket”, it timely grasp the general trend of the Internet of things industry, Revenue in vehicle, intelligent security, gateway, wireless payment, laptop and other fields increased; 2) Further strengthen the fine management ability. The company continues to strengthen internal management and improve operation efficiency. The expense rate during the period is lower than that in the same period of last year, and the long-term profitability is expected to be gradually enhanced.
In the medium and short term, the company has strong growth certainty — two advantages to consolidate the company’s moat
1) module supermarket & channel advantages: the company arranges all major industrial lines of IOT module, covering the whole scene + full system, widely arranges channels at home and abroad, deeply grasps the industry knowhow, and creates a “module supermarket”, which is expected to take the lead in enjoying the dividends of the application of downstream subdivided industries. As a module leader, the company adheres to the strategy of broadening and expanding, creates the most complete product series of multiple categories and systems, and is involved in a wide range of downstream application fields, covering Internet of vehicles, mobile payment, smart home, smart city, wireless gateway, smart meter, smart industry, Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) and other fields, including cellular 2 / 3 / 4 / 5G Lpwa and other formats and layout the corresponding sales system and response mechanism, “module supermarket” is worthy of its name. In addition, the company has a wide range of channels at home and abroad, has a deep understanding of the industry knowhow, and can respond to customer needs in a timely manner. At present, the development momentum of the Internet of things industry is good, and there are many downstream vertical application segments with fragmentation characteristics. Once the outbreak point appears, the company is expected to take the lead in grasping customer needs, make use of existing products and industry knowhow, and quickly seize growth opportunities.
2) on board first mover & R & D advantage: the company has good R & D ability and first mover advantage, has a high market share in on-board business, and has broad development space for intelligent networked vehicles in the future. The growth of relevant businesses of the company is determined. At present, the company’s vehicle business occupies the first place in the market, there are many cooperative vehicle enterprises, the products are rich and of high quality, and the stability and connection ability are guaranteed to meet the needs of all kinds of customers. At present, the global intelligent Internet connected vehicle market will usher in a period of rapid development, and the overall penetration of China’s Internet of vehicles market has huge room to improve. The superimposed vehicle module business is the first to benefit in the development process, and the growth curve of the company is clear.
In the long run, the company has broad development space in the future – two capabilities to ensure the future growth of the company
1) fine management ability: the pre effect of the company’s R & D expenses is initially reflected, and the fine management ability is gradually improved, which is expected to improve the profitability in the future. The company’s R & D expenses are in front. With the promotion of the company’s new products, the long-term cost rate has room to decline; While expanding its scale, the company is gradually improving its overall fine management ability, more refined control over costs and expenses, has a strong scale effect in the long term, and its long-term profitability is expected to be gradually enhanced.
2) whole ecosystem strategic development capability: whole ecosystem strategic deployment capability = comprehensive soft power + the ability to conquer new businesses. Among them, comprehensive
“Soft power” mainly includes industry knowhow, understanding of suppliers and customers, etc; The ability to conquer new businesses is to gradually transition from hardware equipment to solution design and platform services. The price competition in the module industry is fierce. It is difficult to significantly improve the profitability simply by selling module hardware. In the era of everything Zhilian, taking modules as the entrance, we can realize service upgrading and transformation by providing customized solutions for cloud platform / overall industry, Building the ability of ecological strategic layout will help to enhance the overall value of enterprises and consolidate their core competitiveness. The company actively expands new businesses. New businesses represented by antenna business, ODM business and SIM card business have been mature and operated. In the future, with the further improvement of the whole ecological deployment line of the company, there is a broad growth space.
Profit forecast and investment rating
The Internet of things is a long-term golden race track. As a leading enterprise of the Internet of things module, the company has a deep layout of the whole track. It also has significant competitive advantages in high threshold tracks such as vehicle and 5g, and has a large space for development in the future. It is estimated that the total revenue of the company from 2022 to 2023 will be 15.71 billion yuan and 20.097 billion yuan respectively, corresponding to 1.8 times and 1.4 times of PS respectively, and the estimated net profit will be 613 million yuan and 910 million yuan respectively, maintaining the “buy” rating.
Risk factors
The development of the Internet of things industry was not as expected, the intensified competition in the Internet of things industry triggered a price war, and the covid-19 epidemic spread repeatedly
