\u3000\u3 China Vanke Co.Ltd(000002) 881 Meig Smart Technology Co.Ltd(002881) )
Announcement summary: the company released the performance forecast for the first quarter of 2022. It is expected to realize the net profit attributable to the shareholders of the listed company of 23.5 million yuan – 27.5 million yuan, with a year-on-year increase of 52.48% – 78.43%; After deducting the non recurring profit and loss of RMB 19.58 million, the net profit increased by 23.56% – 50.56% year-on-year.
Orders were sufficient in the first quarter, and 5g product delivery increased significantly. In the first quarter, the company is expected to achieve revenue of RMB 400410 million, with a year-on-year increase of 53.85% – 57.69%, continuing the trend of high growth for 21 years. Calculated according to the median value of net profit attributable to parent company, the net interest rate is about 6.30%, with a month on month increase of 0.34pct in 21q4. The non recurring profit and loss mainly comes from government subsidies related to 5g module industrialization, which has an impact on the current net profit of about RMB 4 million. After deducting this factor, the net interest rate is about 5.30%, with a year-on-year increase of 2.22pct and a month on month increase of 1.57pct, Profitability improved significantly. The company had sufficient orders in the first quarter to overcome the adverse impact of the epidemic in Shenzhen and other places on the R & D and supply chain, so as to ensure the R & D progress and product delivery. The product delivery of 5g products in the field of intelligent cockpit and FWA increased significantly, driving the growth of the company’s performance. In 2021, the company’s revenue and profit reached the highest level in history, with a year-on-year growth rate of 75.68% and 330.70% respectively. 5g intelligent modules were shipped in large quantities in the field of intelligent cockpit of new energy vehicles. FWA’s overseas market expanded smoothly, continued shipments in North America and Japan, and projects and orders were harvested in the European market. According to counterpoint data, 2021q4 ranks third in the global module supplier revenue, with a market share of 6.6%. It is expected that with the high prosperity of the Internet of things industry and the large volume of products, the company’s annual revenue will maintain a high growth rate, the market share will further improve, and the profitability will continue to improve driven by the scale effect and the optimization of product structure. According to the information on the company’s official website, the Shanghai subsidiary mainly undertakes R & D work, and it is expected that the local epidemic prevention and control measures will not have a significant impact on the company’s order production and delivery.
Perfect product structure and actively expand downstream applications and customer resources. The company takes intelligent modules as its core advantage, complies with the accelerated trend of intelligence in the Internet of things industry, and has in-depth cooperation with Qualcomm and Huawei upstream manufacturers to increase the research and development of intelligent Android computing modules, form a complete product echelon, establish its own differentiated competitive advantage, and constantly enrich the product series of digital transmission modules, covering 5g, 4glte, 4gcat1, Nb IOT, WiFi modules and other systems, The shipment volume and market share of data transmission modules have been continuously improved. From the perspective of downstream application scenarios, the company’s modules and solution products are mainly oriented to the three major fields of intelligent Internet connected vehicles, FWA and Internet of things pan connection. Through leading customized development technology, the company has formed large-scale applications in downstream fields and established a relatively deep industry accumulation. At the same time, the company continues to extend its layout to new large particle markets such as PC. the 21-year fixed growth plan shows that it plans to raise 604 million yuan for 5g + aiot module and solution industrialization projects and R & D center construction projects, strengthen traditional applications such as downstream new retail, logistics scanning and sharing, and focus on expanding new fields such as intelligent network connected vehicles, industrial interconnection, FWA and PC, so as to broaden the source of revenue of the company. After years of development, the company has accumulated a number of high-quality customer resources represented by overseas leading brands, operators and listed companies. On this basis, the company continues to deepen cooperation with existing customers and expand the scope of customer groups. As of 21h1, the number of customers with a revenue level of more than 5 million / 10 million / 20 million has increased significantly, providing sufficient momentum for the long-term and stable development of the company.
5g module application acceleration, card position vehicle and FWA subdivision track. According to the data of counterpoint, the revenue of 21q45g module accounts for nearly 25%, and the 5g technology has increased by 324% year-on-year, becoming the fastest growing technology in the Internet of things module. CPE is the primary application of 5g technology. Affected by the epidemic situation and the enhancement of 5g network construction in overseas markets, the optical fiber layout is limited due to the superposition of location and terrain factors. 5gfwa has achieved large-scale commercial use and strong demand. Abiresearch predicts that there will be more than 58 million 5gfwa users in the world in 2026. As the main downstream application field of the module, the change of technology promotes the change of module demand. Focusing on the accelerated layout of vehicle intelligence and networking, Audi plans to launch Audi a7l and Audi A6L equipped with 5g module and c-v2x function to the Chinese market, SAIC electric SUV models marvelr, GAC aionv, Byd Company Limited(002594) Han, Great Wall wey mocha and other c-v2x front mounted mass-produced models are steadily advancing, and the commercial landing of c-v2x will accelerate the penetration of vehicle networking modules. The Ministry of industry and information technology is about promoting the coordinated development of “5g + vehicle networking”, Industrial policies such as 5g-v2x standard development and R & D verification will also promote the demand expansion and upgrading of vehicle modules. The company has actively arranged the fields of intelligent network connected vehicles and FWA, and has a complete vehicle module product line covering 5g, c-v2x, WiFi 6 and high-precision GNSS positioning technology. It has achieved mass production and delivery in the field of vehicle front loading, rear loading and monitoring DVR. Among them, 5g products have been mass produced and delivered to China’s leading new energy vehicle enterprises and applied to the intelligent cockpit system. The FWA field has formed a series of terminal products with rates including Cat4, CAT6, Cat12 and 5g millimeter wave, which are directly supplied in large quantities to a number of overseas operators. It is expected to take advantage of the opportunity of switching from overseas FWA market to 5g to further improve the market share.
Investment suggestion: Meig Smart Technology Co.Ltd(002881) is a rapidly rising leader in intelligent modules of the Internet of things, forming a complete product series of intelligent modules. With the continuous expansion of data transmission module products, it has certain differentiation advantages. We believe that intelligent modules have great application space in the future and are optimistic about the company’s business layout in the field of intelligent network connected vehicles and FWA. We expect the net profit of the company from 2021 to 2023 to be 118 million / 202 million / 311 million respectively, and EPS to be 0.64 yuan / 1.09 yuan / 1.69 yuan respectively, maintaining the “buy” rating.
Risk warning: industry competition intensifies the risk; The development of Internet of things is less than expected risk; Upstream chip shortage risk; The public materials used in the research report may have the risk of information lag or untimely update.
