\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Key investment points
Announcement summary: the company issued the 2022 stock option incentive plan, and the number of stock options to be granted to the incentive object is 2.8959 million, accounting for about 1.99% of the total share capital of the company on the date of publication of the draft incentive plan, and the exercise price is 177.57 yuan / share. This grant is a one-time grant without reserved rights and interests.
Equity incentive is bound to core personnel, and the nuclear goal of the college entrance examination shows confidence in long-term development. The incentive objects of this incentive plan include 1 senior manager, 147 core technical / business personnel, and a total of 148 people. The assessment indicators are divided into two levels: corporate performance and personal performance. The performance indicators are that the operating revenue from 2022 to 2025 will not be less than 14.9 billion yuan / 19.3 billion yuan / 24.1 billion yuan / 30.2 billion yuan respectively. The company also sets up a strict performance appraisal system for individuals, which divides the individual appraisal results into five levels, which can make a more accurate and comprehensive comprehensive evaluation of the work performance of the incentive object and determine whether the incentive object meets the exercise conditions. In terms of performance indicators, the year-on-year target growth rate of the company's revenue from 2022 to 2025 shall not be less than 32.92% / 29.53% / 24.87% / 25.31% respectively. The higher performance assessment conditions highlight the company's confidence in medium and long-term development. The incentive plan will establish and improve the company's long-term incentive and restraint mechanism, fully mobilize the enthusiasm and creativity of senior managers and core technical / business personnel, effectively improve the cohesion of the core team and the core competitiveness of the enterprise, effectively combine the interests of shareholders, the company and the core team, ensure the realization of the company's development strategy and business objectives, and stabilize the market leading position in the rapid development of the Internet of things industry.
In the 21st year, the annual revenue increased rapidly, and the fixed increase and expansion of production highlighted the advantages of scale. In 2021, the company's revenue and profit increased significantly, and its operating revenue exceeded 11 billion yuan, a year-on-year increase of 83.60%. Benefiting from the strong demand of the downstream market of the Internet of things outside China, the company's business volume such as LTE, lpwa and 5g modules has improved, made breakthroughs in vehicle, intelligent security, gateway, laptop and other fields, continuously enriched and optimized the product structure, and provided products and technical services to more than 8500 customers outside China. According to the counter point data, the global cellular Internet of things module shipments in 21q3 increased by 70% year-on-year. Quectel Wireless Solutions Co.Ltd(603236) and Qualcomm led the global cellular Internet of things module and chipset markets respectively. The top five module manufacturers are all from China, and the market share of mobile Internet of things shipments reached 31.6%. The company consolidated its leading position by strengthening R & D and production expansion, and set up R & D centers in Shanghai, Hefei, Foshan, Vancouver and Belgrade. In 21 years, the company completed fixed growth and raised 1.06 billion yuan to invest in global intelligent manufacturing center construction projects, R & D center upgrading projects and intelligent vehicle networking industrialization projects, so as to improve R & D and production capacity, It is expected that after the project is completed, the annual production capacity of 90 million wireless communication modules will be formed at least, and the profitability of the company is expected to be gradually improved under the scale effect.
The Internet of things industry is in a high boom and actively layout vehicle modules. GSMA predicts that the number of Internet of things connections will reach 25 billion in 2025, the global Internet of things market capacity will increase to $1.1 trillion, and the CAGR will exceed 20% from 2019 to 2025. The communication module will fully benefit from the high boom of Internet of things and the demand will continue to increase. As one of the main downstream applications of automobile module, with the development of intelligence and networking, the market scale of vehicle communication module, as a key link connecting the perception layer and network layer of vehicle networking, will increase significantly. 5g technology has the characteristics of low delay, large bandwidth and high reliability to meet the complex operation environment of vehicle. 5g module will benefit from the improvement of vehicle networking penetration and the promotion of 5g network construction of operators, and the demand is expected to maintain a high increase. The company has accelerated the layout of on-board and 5g businesses and developed product lines based on different vehicle specification platforms. Its products include 5g, LTE, c-v2x vehicle specification modules, on-board Android intelligent modules, WiFi & Bluetooth modules, GNSS positioning modules, on-board antennas, etc. at present, it has connected with more than 35 well-known host manufacturers and more than 60 mainstream Tier1 manufacturers in the world. 5g + c-v2x series modules have successively supported Chinese express high-compliance hiphix Great Wall Motor Company Limited(601633) Haval H6 and other models have been delivered in batches. The vehicle specification level module has high technical and qualification certification barriers. The company will enhance its competitiveness in the vehicle field and form a performance growth point by virtue of the first mover advantage and product structure optimization.
Investment suggestion: Quectel Wireless Solutions Co.Ltd(603236) is the global leader in cellular Internet of things modules, with the overall market share increasing rapidly. The product matrix is expanded from cellular modules to WiFi & BT modules, antennas and cloud platform services. With the scale effect of capacity expansion, the scale of revenue maintained rapid growth. Equity incentive will escort the long-term development of the company. We expect that the company's EPS from 2021 to 2023 will be 2.42 yuan / 3.76 yuan / 5.56 yuan respectively, maintaining the "buy" rating.
Risk warning: industry competition intensifies the risk; The development of Internet of things is less than expected risk; Risk of price rise of upstream chip raw materials; The public materials used in the research report may have the risk of information lag or untimely update.
