\u3000\u3 Guocheng Mining Co.Ltd(000688) 608 Bestechnic (Shanghai) Co.Ltd(688608) )
Event: on April 15, the company released its annual report for 2021. The company achieved an operating revenue of 1.765 billion yuan, a year-on-year increase of + 66.36%; The net profit attributable to the parent company was 408 million yuan, a year-on-year increase of + 105.51%; The basic earnings per share was 3.40 yuan, a year-on-year increase of + 54.14%.
High R & D investment improves the company’s technical barriers, rapid product iteration and sustained performance growth. The company’s main business is the R & D, design and sales of intelligent audio and video SOC chips, and provides customers with edge intelligent master control platform chips with voice interaction capability in aiot scenarios. Benefiting from the continuous growth of smart wearable and smart home market, the functions of terminal products such as TWS headphones, smart watches and smart speakers continue to iterate. In 2021, the company achieved an operating revenue of 1.765 billion yuan, a year-on-year increase of + 66.36%; The net profit attributable to the parent company was 408 million yuan, a year-on-year increase of + 105.51%; The basic earnings per share was 3.40 yuan, a year-on-year increase of + 54.14%; The company continued to invest heavily in R & D, and the number of R & D team accounted for 83.05% of all employees. In 2021, the R & D cost reached 289 million yuan, a year-on-year increase of + 67.51%, accounting for 16.38% of the operating revenue. In terms of product structure, the company’s Bluetooth audio related business accounted for 80% of its operating revenue in 2021, mainly used in TWS headphones, as well as a small number of neck mounted headphones, Bluetooth speakers, etc; Other products account for 20% of the operating revenue, mainly including smart home WiFi SOC chip, smart watch chip and type-C chip. Relying on the early layout of key technologies and continuous and unremitting iterative improvement, the company maintains a leading position in technology and market.
Emerging application fields are emerging, and the market prospect of smart wearable and smart home is broad; Deeply cultivate brand customers and establish a high business threshold. With the development of intelligent Internet of things, the wide application of intelligent voice interaction scene has effectively driven the accelerated development of upstream integrated circuit industry. According to the statistics of China Semiconductor Industry Association, China’s integrated circuit industry exceeded trillion yuan for the first time in 2021, with a year-on-year increase of 18.2%. The company focuses on the R & D and sales of audio and video SOC master chips in the field of smart wearable and smart home, and realizes the product upgrading of products in many fields with forward-looking R & D, patent layout and continuous technology accumulation. According to the company’s annual report, in the Bluetooth wearable market, the bes2500 series main control chip has been widely used in terminal headset products, and took the lead in launching the bes2600 series of intelligent Bluetooth audio chip “Bluetooth + noise reduction + ear detection” in the second half of the year, further improving the company’s technical barriers in the process of miniaturization and high integration of TWS earphones. In addition to the Bluetooth audio chip, the company’s first generation smart watch chip has been successfully introduced into customers and mass produced. The second generation smart watch single chip solution bes2700bp has also entered the sample delivery stage and is expected to be introduced to the market in 2022. According to Gartner’s prediction, the growth rate of global wearable devices will reach 15.2% in 2022, realizing sales of US $93.9 billion, with broad market prospects; In the smart home market, the second-generation WiFi / Bluetooth dual-mode aiotsoc chip bes260wm has been mass produced and listed, and took the lead in supporting Hongmeng operating system, successfully expanding customers such as Xiaomi and Huawei. The company pays attention to strengthening the cooperation with brand customers. Its products have entered the global mainstream Android mobile phone brands such as Samsung, Huawei, oppo and Xiaomi, as well as professional audio manufacturers such as Harman, Sony, Skullcandy, Edifier Technology Co.Ltd(002351) , Wanmo and have been applied in the intelligent audio products of Internet companies such as Google, Alibaba and Baidu. The foresight of the company’s product definition and leading technological advantages will bring broader space for the company’s development.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be 2.648 billion yuan, 3.787 billion yuan and 4.847 billion yuan respectively, and the net profit attributable to the parent company will be 568 million yuan, 871 million yuan and 1.105 billion yuan respectively. It will be covered for the first time and given a “Buy-A” investment rating.
Risk tip: the prosperity of consumer electronics is lower than the expected risk, and the new product R & D and market development are lower than the expected risk.
