\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Focus: on the evening of March 17, Quectel Wireless Solutions Co.Ltd(603236) released the 2022 equity incentive plan. The plan plans to grant stock options to 148 senior managers, core technical / business personnel, etc., with a total number of 2.896 million stock options, accounting for 1.99% of the total share capital; The grant price was 177.57 yuan, slightly higher than the latest closing price before the announcement of the company.
Equity incentive is bound to the core team, and high goals highlight the company’s growth confidence. 1. This incentive widely covers the company’s core personnel: this equity incentive covers the company’s chief financial officer and 147 core technical / business personnel, of which 68000 were awarded to the company’s chief financial officer, accounting for 2.36% of this incentive plan; The remaining 147 core technical / business personnel accounted for 97.64%. We believe that this equity incentive is expected to fully bind the interests of core employees and mobilize the creativity and enthusiasm of core employees. 2. The target of this equity incentive is relatively high: the exercise condition of this equity incentive is that the operating income of the company from 2022 to 2025 will not be less than RMB 14.9/193241/30.2 billion respectively, about 36.0% / 29.5% / 24.9% / 25.3% year-on-year, and about 28.8% CAGR. We believe that the company’s exercise goal is high, which fully demonstrates the company’s growth confidence. At the same time, the determination of exercise price will also help the company optimize from multiple dimensions in the process of production and operation while its revenue is growing, so as to improve the overall profitability.
The prosperity of the cellular Internet of things module industry is rising, and the company accelerates the layout of vehicle modules. 1. The Internet of things industry continues to enjoy a high boom and 5g is growing rapidly: according to counter point data, the shipments of global cellular Internet of things modules in 2021q3 are + 70% year-on-year, and the overall revenue has exceeded US $1.5 billion. Due to the low base, 5g products have increased by 700% year-on-year. We expect that the follow-up module industry will maintain a high growth rate, and the iterative value of technology will continue to increase. 2. The company has made remarkable achievements in development and made continuous breakthroughs in vehicle modules: in 2020, the global share of the company’s shipments accounted for about 32%, ranking first in the industry. The company continues to enrich its product categories and downstream application fields, and its sales revenue in vehicle, intelligent security, gateway, wireless payment, laptop and other fields has increased significantly. In recent years, the company has continuously increased the layout of vehicle field, and made breakthroughs in product certification and new product release. On January 4, 2022, new on-board Android intelligent modules ag800d and ag600k were released; At the same time, the vehicle specification module ag521r-eu has passed the EU authoritative certification, which can provide module end-to-end solutions for LTE-A high-speed 4G vehicle networking communication and dual band GNSS positioning requirements at home and abroad, and support the first landing of 5g + c-v2x models; At present, the company has cooperated with more than ten main engine manufacturers based on ag55xq series vehicle compliance module, and some models, such as Gaohe hiphix under Chinese express, have been put into commercial use.
Investment suggestion: we believe that with the development of the Internet of things industry and the continuous extension of downstream application fields, the comprehensive income brought by the company’s scale effect plus cost advantage will gradually appear, and the company’s market share is expected to be further improved. At the same time, the vehicle specification level module products have high technical and certification barriers, and the company has obvious first mover advantages. It is expected to fully benefit from the historical opportunities of vehicle intelligence and networking, and open the space for long-term performance growth. We expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 355 / 549 / 974 million respectively, corresponding to PE multiple of 72x / 47x / 26x, and the PE valuation Center since listing is 104x. We expect that the company’s performance under equity incentive is expected to continue to increase, and the release of future profits is uncertain. Maintain a “recommended” rating.
Risk tip: the competition in the Internet of things industry is intensifying; The development of the Internet of vehicles industry is less than expected.
