\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Matters:
The company issued the announcement of main business data from January to February 2022. According to the preliminary accounting of the company, from January to February 2022, the company achieved a total operating revenue of about 1.9 billion yuan, with a year-on-year increase of about 68%; The net profit attributable to the shareholders of the listed company was about 66.6 million yuan, an increase of about 50% year-on-year.
Guoxin communication's view: 1) the company recorded a growth rate of more than 50% in revenue and net profit from January to February, continuing the high growth trend, mainly benefiting from the high prosperity of the demand for the Internet of things. Based on this caliber, the net interest rate increased by 0.4 PCT month on month compared with 21q4, and the profitability was improved.
2) the company's long-term growth logic remains unchanged. On the one hand, the company continues to innovate. The company has a good cooperative relationship with the upstream supply chain and has significant scale advantages. It is expected to continue to consolidate the leading position in the module market and continue to benefit from the dividends of the Internet of things; On the other hand, the expansion and extension of the industrial chain further opens up the growth space of the company.
3) based on the high growth trend of the company from January to February, the company is optimistic about the good performance growth of 22q1; Considering that the first quarter is generally at the low point of the annual performance, based on this, the company's profit forecast is raised. It is expected that the revenue in 22-23 years will be raised from 16.5/23 billion yuan to 17.5/25 billion yuan, and the net profit attributable to the parent company will be raised from 6.4/1.07 billion yuan to 6.4/1.09 billion yuan, corresponding to 40 times and 24 times of PE respectively, maintaining the "buy" rating.
Comments:
From January to February, the performance continued to grow, and the demand for Internet of things continued to boom
From January to February, the company's performance was high and the growth continued. According to the company's announcement, from January to February 2022, the company achieved a revenue of about 1.9 billion yuan, a year-on-year increase of + 68%; The net profit attributable to the parent company was 66.6 million yuan, a year-on-year increase of + 50%. The growth rate of revenue and net profit attributable to the parent company still maintained a high growth trend of more than 50%, and the demand for the Internet of things continued to maintain a high boom. Based on this caliber, the net interest rate of the company from January to February 2022 was about 3.5%, with a month on month ratio of 21q4 + 0.4pct, and the profitability was also improved. From the historical data, the company was generally at the low point of annual revenue in the first quarter due to factors such as the Spring Festival. From January to February, the company achieved high growth, and the company is expected to continue to benefit from the Internet of things dividend in 22q1 and the whole year.
The leading position of the module is stable, and the industrial chain has sufficient potential to expand and extend
The company's leading position in the module market is stable and is expected to continue to benefit from the high prosperity dividend of the Internet of things. According to counterpoint data, 21q3 company has a market share of about 31.6%. Since 2019, mobile has a solid leading position in the cellular Internet of things module market, and its market share ranks first in the world. The company continues to innovate its product portfolio, and has a good cooperative relationship with the upstream supply chain with significant scale advantages. The company is expected to continue to consolidate its leading position in the module market. The high-profile of the cellular Internet of things module industry continues. From the perspective of communication system, the trends of 4G to 5g upgrading and 2 / 3G network withdrawal remain unchanged, which is expected to drive the market volume and price of cellular modules to rise simultaneously; In terms of application fields, there is a strong demand for Internet of vehicles, CPE and pan IOT applications such as pos / PDA. According to ABI research, it is estimated that the global shipment of cellular Internet of things modules will maintain a compound growth rate of 20% in 21-24 years. The shipment will exceed 800 million pieces in 2024, and the corresponding market scale is expected to exceed US $6.3 billion.
The company further extends the industrial chain with modules as the core, provides one-stop solutions for the Internet of things, and opens up growth space. The company gives full play to its existing advantages and extends its industrial chain layout with module business as the core. It can provide one-stop solutions including wireless communication module, antenna and cloud platform management of Internet of things, opening up growth space.
Valuation of comparable companies
The company's main business is the wireless communication module of the Internet of things. The newly expanded main businesses include ODM, antenna, cloud platform of the Internet of things, etc., which have been transformed into the enabler of Internet of things solutions. Therefore, we mainly select the listed companies related to the module as the comparable objects, including Fibocom Wireless Inc(300638) , Shenzhen Neoway Technology Co.Ltd(688159) , Meig Smart Technology Co.Ltd(002881) , Gosuncn Technology Group Co.Ltd(300098) , Sunsea Aiot Technology Co.Ltd(002313) , etc. Among them, the top companies in the global market share mainly include Fibocom Wireless Inc(300638) , Sunsea Aiot Technology Co.Ltd(002313) and Meig Smart Technology Co.Ltd(002881) , etc. In addition, the ODM and other businesses mainly expanded by the company are comparable to the Internet of things terminal solution businesses of Queclink Wireless Solutions Co.Ltd(300590) , Gosuncn Technology Group Co.Ltd(300098) , Meig Smart Technology Co.Ltd(002881) . As Sunsea Aiot Technology Co.Ltd(002313) , Gosuncn Technology Group Co.Ltd(300098) do not meet the consistency expectation in the next three years, we mainly select Fibocom Wireless Inc(300638) , Queclink Wireless Solutions Co.Ltd(300590) and Meig Smart Technology Co.Ltd(002881) as the comparable companies.
According to wind's unanimous expectation, the average PE value of comparable companies in 2022 is 29 times, and the company's valuation is higher than the industry average. Considering that on the one hand, the company's leading position in the industry is stable, and its global market share in 2020 / 21q3 is 37% and 32% respectively, which lags far behind other manufacturers; On the other hand, the company's module business itself still benefits from the industry dividend and is in a period of rapid growth. The newly expanded businesses such as ODM, antenna and Internet of things platform further open the company's growth space, and the relevant business performance is expected to be realized gradually, which is also in a period of rapid growth. Therefore, the company's high growth supports the leading premium, which we believe should be higher than the industry average.
Investment advice
1) the revenue and net profit of the company recorded a growth rate of more than 50% from January to February, continuing the high growth trend, mainly benefiting from the high demand of the Internet of things. Based on this caliber, the net interest rate increased by 0.4 PCT month on month compared with 21q4, and the profitability was slightly repaired.
2) the company's long-term growth logic remains unchanged. On the one hand, the company continues to innovate. The company has a good cooperative relationship with the upstream supply chain and has significant scale advantages. It is expected to continue to consolidate the leading position in the module market and benefit from the dividends of the Internet of things; On the other hand, the expansion and extension of the industrial chain further opens up growth space.
3) based on the company's high growth trend from January to February, it is optimistic that the company's 22q1 will achieve good performance growth. Considering that the first quarter is generally at the low point of the annual performance, based on this, the company's profit forecast is raised. It is estimated that the annual revenue of 22-23 will be raised from 16.5/23 billion yuan to 17.5/25 billion yuan, and the net profit attributable to the parent company will be raised from 6.4/1.07 billion yuan to 6.4/1.09 billion yuan, corresponding to 41 times and 24 times of PE respectively, maintaining the "buy" rating.
Risk tips
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.
