\u3000\u3 China Vanke Co.Ltd(000002) 881 Meig Smart Technology Co.Ltd(002881) )
Event:
The company released the performance forecast for the first quarter of 2022. In Q1 of 2022, the operating revenue was 400410 million yuan, an increase of 53.85% – 57.69% over the same period of last year.; The net profit attributable to the parent company was 23.5-27.5 million yuan, an increase of 52.48% – 78.43% over the same period of last year; The non net profit deducted was 19.5 million yuan – 23.5 million yuan, an increase of 29.86% – 56.50% over the same period of last year.
Our comments are as follows:
1. Overcome the adverse impact of the epidemic, sufficient orders + large quantities of products in new fields to boost growth
The company’s revenue continued to maintain a high growth rate. Historically, the first quarter is usually the off-season of the company’s operating revenue. In 2022q1, under the repeated epidemic in China, the company overcame the adverse impact of the epidemic on the R & D and supply chain, actively ensured the R & D progress and product delivery, and maintained high growth of operating revenue. Specifically, the market recognition of the company’s wireless communication module + solution business model continues to improve, and the business orders of wireless communication module and solution are sufficient. In addition, the company continued to develop 5g modules and actively promoted the expansion of new fields. 2022q1 achieved results, and the delivery of 5g products in the fields of intelligent cockpit and FWA increased significantly. We believe that the company’s continuous development of market and customers will provide sufficient impetus for the company’s growth, the continuous volume of vehicle and FWA will significantly increase the scale of revenue, and the company’s revenue will continue to increase in the future.
2. The profitability has stabilized, and we are actively looking forward to the increase of profit margin after the price rise of raw materials + adverse factors of the epidemic
According to the company’s performance express in 2021, the net interest rate in 2021 was about 6.0%, significantly higher than that in 2020 (2.45%). The profitability of 2022q1 company remains stable or slightly improved under the continuous rise of raw material prices and the impact of the epidemic, and the net interest rate is expected to be in the range of 5.73% – 6.88%. The scale effect of the company gradually appears, the product is highly intelligent and customized, and has strong premium ability. It continues to deal with the impact of shortage and price rise of raw materials through comprehensive measures such as strengthening strategic goods preparation, price transmission, cost reduction and efficiency increase in the supply chain, and improving the shipment demand of high gross profit products. We believe that after the price of raw materials stabilizes and falls and the impact of the epidemic subsides, we can actively look forward to the further improvement of the company’s profitability.
3. Provide customers with energy for sustainable development and increase market power
Overall:
1) at present, the company has become one of the leading manufacturers in the industry. The shipment volume of 4G intelligent modules of the company ranks in the forefront of the industry, and it is the first to launch 5g intelligent modules in the industry. At present, it has formed a complete product series of intelligent modules and has strong technology leadership. At the same time, 2021q4 has ranked third in the world in terms of the revenue share of global IOT module suppliers, ranking in the forefront of the industry and has scale effect;
2) the company’s leading customized development technology has formed large-scale applications in the core areas of the Internet of things such as new retail, intelligent Internet connected vehicles and 5gfwa, and has established a relatively deep industry accumulation;
3) after years of business 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. The company’s market foundation continues to develop steadily, especially the rapid development of overseas markets, which provides sufficient momentum for the long-term and stable development of the company. With its own leading technology and continuous expansion of the market and customers, the company is expected to make breakthroughs in its future development.
Profit forecast and investment suggestions:
The company is one of the first tier manufacturers of Internet of things modules. With the high prosperity development of the Internet of things industry, the company continues to expand its layout in many fields. It is expected to expand rapidly in new technology fields such as operator FWA terminals and vehicle products. The rapid growth of products in various fields is expected, or it will fully benefit from the vigorous development of the Internet of things. It is estimated that the net profit attributable to the parent company in 22-23 years will be 205 million yuan and 312 million yuan respectively, corresponding to 27 times of price earnings in 22 years and 18 times of price earnings in 23 years, maintaining the rating of “overweight”.
Risk warning: the risk of continuous increase in the cost of upstream raw materials, the risk of less than expected customer development, the risk of fierce market competition, the risk that the development of new products is slower than the market, and the performance forecast are the preliminary calculation results. The specific financial data are subject to the first quarterly report disclosed by the company
