\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Event:
The company issued the 2022 stock option incentive plan (Draft), which plans to grant 2.896 million stock options to 148 senior managers and core technical / business personnel, accounting for about 1.99% of the company’s total share capital of 145 million shares. The performance assessment target is that in 2022 / 2023 / 2024 / 2025, the company’s operating revenue will not be less than 14.9 billion yuan (+ 32.9%), 19.3 billion yuan (+ 29.5%), 24.1 billion yuan (+ 24.9%) and 30.2 billion yuan (+ 25.3%) respectively.
Our comments are as follows:
1. Clear assessment objectives and high performance can be expected!
The equity incentive plan specifies that the performance assessment target is that the operating revenue from 2022 to 2025 is not less than 14.9 billion yuan (+ 32.9%) / 19.3 billion yuan (+ 29.5%) / 24.1 billion yuan (+ 24.9%) / 30.2 (+ 25.3%) billion yuan respectively, and the compound growth rate of operating revenue from 2022 to 2025 is 26.6%. The high performance appraisal target and the sustained and rapid growth of operating income show the strong confidence of the company in the future development and the expectation of the sustained high prosperity of the industry. The company’s performance can be expected to increase continuously.
2. Fully mobilize the enthusiasm of employees, bind common interests and promote development.
The stock option incentive plan is for 148 financial directors and 147 core technical / business personnel. The company’s move will help to attract and retain talents, fully mobilize the enthusiasm and creativity of senior managers and core technical / business personnel, bind the common interests of the company and employees, and add impetus to the long-term development of the company.
3. The industry scale continues to grow, the market is booming, and the company’s share is expected to continue to increase, which can be expected in the future
With the rapid growth of connectivity, the golden age of the Internet of things is coming. According to the statistics of IOT analytics, the number of Internet of things connections has been flat in 2019, and the number of non internet of things connections is expected to increase rapidly at a compound growth rate of 21% in the future. According to Zhiyan consulting data, at present, the scale of China’s Internet of things market has exceeded RMB 2 trillion, with a year-on-year growth rate of more than 20%. IDC predicts that the scale of the global Internet of things market is also expected to reach US $1.1 trillion in 2025. The Internet of things provides traffic between objects and creates new traffic value. We expect that the application field will continue to expand and the market scale will grow rapidly in the future.
Looking forward to the future, the company’s share is expected to continue to increase rapidly, and the scale effect is expected to continue to appear under the trend of high income growth: 1) the growth rate of the company’s income in the past few years has been significantly higher than that of the industry; 2) The company has rich product series and strong competitiveness of 4G & 5g products; 3) The company has a wolf culture, focuses on research and development and strong sales. On the basis of the existing scale advantages, the company has certain advantages in procurement cost / stable supply chain. At the same time, the self built production line continues to be put into operation. In the future, the advantages of the company in customization, rapid delivery and cost control are expected to further appear.
Profit forecast and investment suggestions: benefiting from the rise in the volume and price of Internet of things modules, Quectel Wireless Solutions Co.Ltd(603236) as the industry leader, has obvious competitive advantages and will fully enjoy the industry dividend. At the same time, the company actively develops industry customers and continuously improves its share, driving the company’s continuous high growth. Benefiting from the high prosperity of the industry and the continuous improvement of the company’s share, the net profit attributable to the parent company in 21-23 years was adjusted to 351 million, 611 million and 915 million yuan (the original value was 350 million / 590 million / 900 million yuan), corresponding to 45x PE in 22 years, and the “overweight” rating was reiterated.
Risk tip: the sales volume of intelligent Internet connection / new energy vehicles is lower than expected; Fierce competition in the industry and the risk of price decline; The price rise of upstream chips and raw materials affects profitability; The order execution progress is lower than expected, etc
