\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Event: on April 16, 2022, the company released the annual report of 2021. In 2021, the company realized an operating revenue of 11.262 billion yuan, a year-on-year increase of 84.45%; The net profit attributable to the parent company was 358 million yuan, a year-on-year increase of 89.43%. In the fourth quarter of 2021, the company achieved an operating revenue of 3.786 billion yuan, a year-on-year increase of 99.49%; The net profit attributable to the parent company was 121 million yuan, a year-on-year increase of 89.25%.
Substantial growth in revenue and continuous expansion of business in overseas markets: thanks to the improvement of business volume such as vehicle module and 5g module, the company's sales revenue in vehicle, intelligent security, gateway, wireless payment, laptop and other fields increased significantly, and the company's operating revenue increased significantly. At the same time, thanks to the good cost control ability and the improvement of operation and management efficiency, the three fee rates of the company decreased and the net profit attributable to the parent company increased significantly. In 2021, the company's gross profit margin was 17.56%, a year-on-year decrease of 2.67pct, mainly due to the rise in the price of raw materials. The company continued to adhere to the internationalization strategy, relying on the development and accumulation of new products in recent years, the perfect supply chain system and the delivery ability of quality and quantity, the company continued to explore the overseas market, and the overseas operating revenue increased by 113.27% year-on-year in 2021.
Release a number of new products and win a large share of mobile centralized purchase: the company's products continue to push through the old and bring forth the new. In terms of 5g module, in February 2021, the company took the lead in launching the second generation 5gnr communication module supporting 3GPP R16 protocol. In August 2021, five 5g modules of the company won the bid for centralized purchase of 5g general module products of China Mobile with the largest share, accounting for nearly 50%. At present, the company's 5g module products have supported more than 1000 industry customers around the world to develop and commercialize 5g terminal products. In terms of on-board modules, in 2021, the company officially obtained the international certification of aspire Cl2 (secondary level of software process improvement and capability evaluation model in the automotive industry), marking that the company's software development capability in the field of intelligent networked vehicles has reached the international advanced level, which can further provide high-quality on-board products and services for global automobile manufacturers and tier 1 partners. In addition, in order to comply with the wave of aiot Zhilian application innovation, the company also launched a series of module products supporting AI algorithm. Among them, the new generation flagship sg865w-wf intelligent module has a comprehensive computing power of up to 15tops, which can seamlessly connect 5g and 4G modules, and has powerful data processing functions and rich multimedia peripherals, helping 5g Internet of things applications to achieve a qualitative breakthrough.
Accelerate the layout of new products and achieve initial results in new businesses: relying on the advantages of global operation of existing modules and a sound support service system, the company continues to improve antenna products and technical services. By the end of 2021, the company has launched more than 300 kinds of antenna products, established long-term strategic cooperation relations with customers in high-end markets at home and abroad, and has been widely used in smart meters, two wheeled vehicles, smart industry, power industry, UAV, smart home and other fields. Relying on many industry customers and combined with 5g, AI and other new generation information technologies, the company has deeply integrated digital informatization with all walks of life in the city, enabling subdivided fields such as transportation, education, medical treatment and industry to help the city's refined digital management and innovative governance. The company has successively won the "recommended brand for China's smart city construction in 2021" and "2021 best smart city application scheme Award for China's Internet of things".
Investment suggestion: the company is an industry-leading provider of overall solutions for the Internet of things. We estimate that the operating revenue of the company from 2022 to 2024 will be 15.334/20.730/29.079 billion yuan respectively, with a year-on-year increase of 36.2% / 35.2% / 40.3%; The net profit attributable to the parent company was 608 / 941 / 1318 million yuan respectively, with a year-on-year increase of 69.8% / 54.6% / 40.1%; The corresponding EPS is 4.18/6.47/9.07 yuan respectively. We gave the company 41 times PE in 2022, corresponding to the target price of 171.38 yuan, maintaining the "Buy-A" investment rating.
Risk tip: the rise of chip price is higher than expected, the expansion of vehicle business is lower than expected, the industry competition is intensified, the trade friction between China and the United States is intensified, and the prevention and control effect of overseas epidemic is lower than expected
