\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Core view
The performance in 2021 is in line with expectations. The company’s annual revenue in 2021 was 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 + 86.95%; The net profit deducted from non parent company was 323 million yuan, a year-on-year increase of + 89.76%. The performance is basically consistent with the forecast, and the annual performance is in line with expectations.
Strong demand + improved operational efficiency, driving sustained and high performance growth. In a single quarter, the company achieved an operating revenue of 3.73 billion yuan in 21q4, a year-on-year increase of + 97%; The net profit attributable to the parent company was 110 million yuan, a year-on-year increase of + 79%. According to the company’s announcement, the company’s high performance growth in 2021 mainly benefits from: (1) the downstream demand of the Internet of things continues to be strong. In 2021, the sales revenue of the company’s module business in vehicle, intelligent security, gateway, wireless payment, laptop and other fields increased significantly; (2) The company has continuously strengthened internal management and improved operation efficiency, which is caused by the decrease of expense rate during the period compared with the same period of last year.
The high prosperity of the Internet of things continues, and the expansion of the industrial chain opens up room for growth. Benefiting from the continuous growth of the number of Internet of things connections, as an inevitable benefit link of networking, the high boom of Internet of things modules continues. According to the data of counterpoint, the global market share of 21q3 company is 32%, and the company is the global leader. During the reporting period, in order to cope with the expansion of production and sales scale in the future, the company increased stock, increased inventory and purchased R & D equipment, which is expected to further consolidate the leading position of the module.
Moreover, the company continues to innovate products, enrich and optimize the product structure, and has formed a one-stop solution including cellular communication module, Wi Fi & BT module, GNSS module, antenna and cloud platform. The expansion and extension of the industrial chain is expected to open up growth space, improve profitability and have sufficient long-term growth momentum.
Risk tip: the development of Internet of things is not up to expectations; Intensified market competition and fierce price war; The expansion of the company’s industrial chain did not meet expectations.
Investment advice: maintain the profit forecast and maintain the “buy” rating.
Maintaining the previous profit forecast, it is estimated that the net profit attributable to the parent company from 2022 to 2023 will be RMB 640 / 1.07 billion respectively, with a year-on-year growth rate of 82 / 68%; The diluted EPS is expected to be 4.40/7.37 yuan, and the corresponding PE of the current stock price is expected to be 39 / 23x. The leading position of the company’s modules is stable and continues to benefit from the dividends of the Internet of things. The expansion and extension of the industrial chain is expected to further open up growth space, improve profitability and maintain the “buy” rating.
