\u3000\u3 Shengda Resources Co.Ltd(000603) 738 Tkd Science And Technology Co.Ltd(603738) )
In 21 years, the revenue increased by 96.6% year-on-year, and the net profit attributable to the parent company increased by 547% year-on-year. In 21 years, the company achieved revenue of 1.241 billion yuan (YoY + 96.6%), of which 4q21 revenue was 343 million yuan (YoY + 76.0%, QoQ + 2.4%); The net profit attributable to the parent company is 250 million yuan (YoY + 546.9%), of which the net profit attributable to the parent company of 4q21 is 78.74 million yuan (YoY + 186.0%, QoQ + 4.2%); The net profit attributable to the parent company after deducting non profits was 249 million yuan (YoY + 1027%). The company’s high performance growth in the past 21 years has benefited from: 1) the surge in demand for emerging application scenarios such as 5g, aiot, Internet of vehicles and WiFi 6, and the acceleration of domestic substitution process in crystal oscillator industry; 2) Relying on the technological advantages of semiconductor lithography, the company expands the scale of self-produced high-end lithography chips and increases the iteration speed of new products; 3) Each production base continues to increase cost and operating expense control and continuously improve product market share.
1q22 net profit attributable to the parent company was 60-80 million yuan, with a year-on-year increase of 57% – 110%. The company released 1q22 performance forecast. It is estimated that 1q22 will realize a net profit of 60-80 million yuan (YoY 57.3% – 110%) and a net profit of 40-60 million yuan (YoY 10.9% – 66.4%) after deducting non profits. The company transferred all the equity of its holding subsidiary Shenzhen penghe in January 22. The investment income generated and the impairment provision for the loan of Shenzhen penghe have a great impact on the non recurring profits and losses of 1q22; In addition, the company expects the share based payment fee confirmed by 1q22 to be about 6.87 million yuan. 1q22’s operating performance has achieved year-on-year high-speed growth, mainly due to: 1) actively deepening cooperation with end customers; 2) The product structure was optimized, and the product price and gross profit margin increased year-on-year; 3) New products are vigorously expanded in new fields such as automobile and industry to enhance market increment.
5g, aiot and automotive electronics drive the growth of crystal oscillator demand, and the company’s product structure continues to be optimized. According to CS & a data, the global crystal oscillator market reached US $3.446 billion (YoY + 13%) in 2020, mainly due to the surge in demand in 5g, aiot and automotive electronics. In the 5g field, according to TXC data, the global 5g infrastructure market scale will increase by 24% CAGR in 21-24 years, and the global 5g mobile phone shipment will increase from 500 million in 21 years to 1.12 billion in 24 years (CAGR: 31%). In the automotive field, TXC predicts that the penetration rate of global electric vehicles will increase from 5.2% in 21 years to 17% in 25 years and 40% in 30 years. The demand for crystal oscillator of a single electric vehicle is 100150, which is significantly higher than that of 60-100 fuel vehicles. The company is expected to seize the opportunity of strong demand + domestic substitution, give full play to the technological advantages of semiconductor lithography, further improve the global market share and expand high value-added markets such as automobile and industry.
Investment suggestion: we expect that the company’s operating revenue will increase by 51.0% / 30.1% year on year to RMB 1873 / 2436 million in 22 / 23, and the net profit attributable to the parent company will increase by 52.5% / 30.5% year on year to RMB 381 / 497 million. With reference to the 22.46 times PE valuation of the consistent expected average of the comparable company wind in 2022, we will give the company 21-22 times the expected PE in 2022, corresponding to the target price of RMB 40.27-42.18, maintaining the “buy” rating.
Risk tip: the downstream demand is less than expected, the development of new products is less than expected, and the competition in crystal oscillator industry is intensified.
