\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 08 Zhongji Innolight Co.Ltd(300308) )
Events
The company released the performance express of 2021, and achieved an operating revenue of 7.695 billion yuan in 2021, with a year-on-year increase of 9.16%; The net profit attributable to the parent company was 875 million yuan, a year-on-year increase of 1.07%; The non net profit deducted was RMB 727 million, a slight decrease of 4.94% over the same period. In the fourth quarter of 2021, the operating revenue in a single quarter was 2.373 billion yuan, an increase of 28.6% year-on-year and 17.2% month on month; The net profit attributable to the parent company was 315 million yuan, an increase of 18.5% year-on-year and 43.5% month on month.
Our comments are as follows:
Quarterly performance continues to improve, short-term factors have a certain impact on the current performance, and the impact is expected to be gradually eliminated in the future.
From a quarterly perspective, the company's operating revenue and net profit attributable to the parent company increased steadily quarter by quarter in 2021. As a whole, in 2021, 1) global traffic growth drives key customers of the data center to continuously increase capital expenditure investment, accelerate the deployment of high-end optical modules such as 200g and 400g, and the company has strong demand for orders; 2) Revenue increased significantly quarter on quarter. 400g high-end products have become the primary source of revenue of the company. The optimization of product structure, cost reduction and efficiency increase have promoted the year-on-year improvement of overall gross profit margin; 3) The company will increase investment in research and development of new technologies and products, and high-end new products will gradually form large-scale sales, bringing incremental revenue.
However, in 2021, 1) the equity incentive fee will affect the profit by about 58 million yuan; 2) Investment income and government subsidies decreased by about 68 million yuan year-on-year; 3) The performance and share transfer of Zhongji intelligent, a wholly-owned subsidiary, reduced the company's consolidated profit by about 20 million yuan. The above short-term events have a certain impact on the annual performance of 21 years, and these impacts are expected to gradually weaken in the future.
Looking forward to the future, traffic growth drives data center customers to continue to increase capital expenditure investment, and the demand for high-end optical modules is expected to continue to grow.
According to Google's latest data, among its network traffic, traditional server traffic has increased by 40%, machine learning related traffic has increased by 55-60%, and AI related traffic has accounted for more than 50% of the total data center traffic. In the future, with the continuous development of AI, metauniverse and other new technologies, network traffic will maintain long-term growth. As the core bearer of network traffic, cloud manufacturers continue to increase capital expenditure and accelerate the deployment of high-end optical modules such as 200g / 400g. Thanks to the strong demand of 800g series of high-end products, the company is expected to continue to consolidate its leading position in the global industry and deliver the next generation of products to customers in the future.
The price reduction factor worried by the market is expected to usher in a significant narrowing stage of price decline in the future, and the demand for high-end optical module products is expected to further exceed expectations.
According to the latest forecast data of lightcounting, the prices of main products of digital communication optical module are relatively stable from 2022 to 2026. Compared with the price reduction of about 40% in some previous years, the comprehensive price reduction of main optical module products in the future is expected to be about 15%. At the same time, lightcounting also raised the market demand forecast of major products such as Facebook 200g FR4 from 2022 to 2023, Chinese cloud manufacturer 200g Sr4 and 400gsr8 / DR4. The continuous growth of traffic and the continuous investment of major manufacturers in new technologies such as metauniverse / AI are expected to bring more than expected growth points to the optical module industry.
Investment advice and profit forecast
As the global leader of high-end digital communication optical modules, the company has a clear growth track from 40g to 100g and then to 400g. The advantages of 200g / 400g era company are expected to continue to the next generation of 800g products and continue to lead the development of the industry. Benefiting from the recovery of cloud computing capital expenditure driven by the continuous growth of traffic, as well as the continuous investment in 5g construction in the telecom market and the upgrading of Gigabit broadband, the demand growth / rate upgrading of access network is driven. The growth of the company in 22 years is expected to accelerate. Due to the impact of short-term factors such as equity incentive expenses, the forecast of the company's net profit attributable to the parent company for 21-23 years was adjusted from RMB 890 million, RMB 1170 million and RMB 1440 million to RMB 870 million, RMB 1170 million and RMB 1440 million respectively, corresponding to 24 times PE in 22 years and 20 times PE in 23 years, and the "overweight" rating was reiterated. Risk warning: the downstream demand is lower than expected, the impact of overseas epidemic and supply chain is higher than expected, the market competition is higher than expected, the risk of exchange rate fluctuation, the performance express is not audited, and the actual performance is subject to the annual report
