\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Key investment points
The company announced that its total operating revenue was about 6.8 billion yuan from January to February 2022, with a year-on-year increase of about 1.9 billion yuan; The net profit attributable to shareholders of listed companies was about 66.6 million yuan, an increase of about 50% year-on-year.
The performance increased sharply in the first two months and the profitability rebounded. From January to February of the 22nd year, the performance of the company continued the trend of high growth for 21 years. The revenue and net profit attributable to the parent company exceeded 21q1. The revenue of 21q1 was 1.856 billion yuan and the net profit attributable to the parent company was 60.52 million yuan. It is expected that the year-on-year growth rate of performance in the first quarter will be greatly improved. In terms of profitability, the company's net profit margin from January to February of 22 years was 3.51%, which was significantly improved compared with the net profit margin of 3.07% in the single quarter of 21q4. Compared with the net profit margin of 3.26% in 21q1 and 3.14% in the whole year, the company's gross profit margin and net profit margin decreased in the first half of 21 years due to the rise in the price of upstream raw materials and the increase in the proportion of CAT1 module with low gross profit margin. Q3 began to rise gradually with the increase of some prices and the release of production capacity, At present, the company has issued a positive, stable and normal response plan for raw material supply, continued to prepare goods for 6 months, and strengthened communication with suppliers. It is expected that the profitability of the company will continue to improve with the emergence of scale effect, the optimization of product structure and the improvement of operation efficiency. On the supply side, the company's own production and manufacturing centers are mainly distributed in Hefei and Changzhou. The local epidemic situation is well controlled. In addition, domestic and foreign cooperative agent factories provide production capacity, which is widely distributed. The company's production capacity supply is limited by the epidemic situation. Throughout the year, it is expected that with the high prosperity of the Internet of things industry, the continuous large-scale production of the company's products in new fields such as vehicle, gateway and notebook computers and the expansion of overseas high gross profit market, the performance growth trend in 22 years is relatively clear.
R & D and production expansion consolidate the leading advantages, and the cost rate is expected to decline. According to 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 occupied the first place in the module and chip market respectively. Chinese manufacturers contributed nearly 60% of the global module shipments, of which Quectel Wireless Solutions Co.Ltd(603236) accounted for 31.6%. The module industry presents an oligopoly competition pattern. The company consolidated its leading position by increasing R & D and production expansion. In the first three quarters of 21 years, the R & D expenditure was 738 million yuan, an increase of about 70% year-on-year. It set up R & D centers in Shanghai, Hefei, Foshan, Vancouver and Belgrade to lead 5g, lpwa, intelligent modules and c-v2x and other products and technological innovation. As of 20 years ago, the company had 2366 R & D personnel, accounting for 78.21% of the total personnel, With the in-depth development of business and the increase of R & D projects, the company's R & D team will further expand. In the 21st year, the company completed the fixed increase and raised 1.06 billion yuan to invest in the global intelligent manufacturing center construction project, R & D center upgrading project and intelligent vehicle networking industrialization project. It plans to build 20 production lines in Changzhou. At present, 15 production lines are in production. By the year of reaching production capacity, the company will form an annual production capacity of 90 million wireless communication modules, and the market share is expected to be further improved. The scale effect formed by the expansion of production and the strengthening of the company's management measures, the cost rate is expected to decline during the 22-year period, the superposition of business structure optimization, and the new high gross profit business contributes to the profit increment, driving the improvement of the company's profitability.
Take the module as the center, enrich the business layout and optimize the product structure. Module is the main component of the company's revenue. The company's existing module products include 2G / 3G / 4G / 5G and other cellular communication modules, lpwa modules, WiFi & BT modules, GNSS modules, etc. the product sequence is complete, covering a variety of scenes such as automobile, gateway, PC, wireless payment, energy and so on. The company takes the module as the entrance, and develops peripheral products and value-added services such as antenna, Internet of things cloud platform and ODM business to adapt the module, so as to help customers shorten the development cycle, Improve the company's one-stop solution service capability. At present, more than 300 products of antenna have been widely used in the market. ODM business has certain project reserves and broad downstream market space. With the maturity of technology and large-scale products, it is expected to become a new growth point of the company's business. The company focuses on 5g and vehicle mounted areas. 5g modules have been shipped in batches. At present, they are mainly in MBB and FWA markets. It is expected that there will be significant growth in industrial manufacturing, medical, XR and other markets. Vehicle mounted products include LTE-A, 5g, wi-fi6 and other vehicle specification modules, as well as vehicle mounted intelligent modules, WiFi & Bluetooth modules, GNSS positioning modules, vehicle mounted antennas, etc. at present, more than 35 well-known host manufacturers and more than 60 mainstream Tier1 manufacturers have cooperated in mass production. The company obtained the international certification of aspirecl2 in November 21, and the software development ability in the field of intelligent networked vehicles has reached the international advanced level. The vehicle specification module has high technical and qualification certification barriers. The company has established the first mover advantage. With the large-scale product volume and iterative update, the competitiveness of on-board products will continue to improve.
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. It is estimated that the net profit of the company from 2021 to 2023 will be 351 million yuan / 546 million yuan / 808 million yuan, 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.
