\u3000\u3 Guocheng Mining Co.Ltd(000688) 608 Bestechnic (Shanghai) Co.Ltd(688608) )
Events
Bestechnic (Shanghai) Co.Ltd(688608) released the annual performance report for 2021: the company achieved an operating revenue of 1.765 billion yuan in 2021, with a year-on-year increase of 66.36%, a net profit attributable to the parent company of 408 million yuan, with a year-on-year increase of 105.51%, and a net profit attributable to the parent company of 294 million yuan after deduction, with a year-on-year increase of 71.93%.
Key investment points
The main business grew steadily, and the gross profit margin was under pressure under tight production capacity
In terms of breakdown products, the company’s Bluetooth audio related business revenue accounted for 80% in 2021. The revenue of ordinary Bluetooth SOC and intelligent Bluetooth SOC reached 471 million yuan and 940 million yuan respectively, with a year-on-year increase of 40.72% and 72.05% respectively; In terms of gross profit margin, the overall gross profit margin of the company in 2021 was 37.29% (year-on-year -2.76pct), which was due to the rising cost caused by the tension of semiconductor upstream supply chain. The gross profit margins of ordinary Bluetooth SOC and intelligent Bluetooth SOC were 35.69% (year-on-year + 0.94pct) / 42.88% (year-on-year -4.38pct); In terms of period expenses, in 2021, the expense rate (excluding R & D) was 3.65% (year-on-year -2.93 PCT), of which the sales expense rate was 0.62% (year-on-year -0.01 PCT), the management expense rate was 4.36% (year-on-year -0.76 PCT), and the financial expense rate was – 1.32% (year-on-year -2.1% PCT). In addition, in 2021, the company’s R & D expenses were 289 million yuan (year-on-year + 67.51%), and the R & D expense rate reached 16.38%.
The audio / WiFi SOC continues to iterate, and the smart watch SOC is successfully mass produced. In 2021, the functions of the company’s TWS headset, WiFi smart speaker and other terminal products continue to iterate, and the new product smart watch chip is mass produced and listed. According to Gartner’s prediction, wearable devices will grow by 15.2% in 2022, with sales reaching US $93.9 billion, of which the sales of smart watches will reach US $31.3 billion, a year-on-year increase of 21.3%.
In terms of Bluetooth audio SOC, bes2500 series main control chip has been widely used in terminal headset products of mobile phone manufacturers, professional audio manufacturers and e-commerce brands. In the second half of 2021, the company took the lead in launching the bes2600 series of “Bluetooth + noise reduction + in ear detection” in the industry. At present, it has achieved mass production among brand customers. In addition, the company took the lead in launching a new generation of bes2700soc based on TSMC 12NM FinFET process, which has been successfully streamed and entered the sample delivery stage.
In terms of WiFi SOC, the company has successfully expanded customers such as Xiaomi and Huawei in the field of smart home. The second generation WiFi / Bluetooth dual-mode aiotsocbes260wm (22nm), which takes the lead in supporting Hongmeng operating system, has been mass produced and listed. In addition to being applied to smart speakers, it can also be widely used in the field of smart appliances as an intelligent voice module. In terms of smart watch SOC, the company’s first generation smart watch chip integrating display, storage, audio and connection was successfully introduced into customers and mass produced, supporting BT5 2 dual mode Bluetooth, high computing power and low power consumption. At the same time, the second generation smart watch solution bes2700bp has entered the sample delivery stage and is expected to be introduced to the market in 2022. We believe that the company has continued to cultivate the field of main control SOC chip, and has expanded from the field of TWS earphones to smart home and smart watch applications. Deep cultivation brand customers have entered the global mainstream Android mobile phone brands such as Samsung, Huawei, oppo, Xiaomi and vivo, professional audio manufacturers such as Harman, Sony, Skullcandy, Edifier Technology Co.Ltd(002351) , Wanmo, Alibaba, Baidu, Google, Anker Innovations Technology Co.Ltd(300866) and other Internet and e-commerce company supply chains, The depth and breadth of brand customers will become an important competitive advantage and commercial barrier of the company, and build a solid foundation for the long-term development of the company.
Profit forecast
It is predicted that the company’s revenue from 2022 to 2024 will be 2.642 billion yuan, 3.850 billion yuan and 4.991 billion yuan respectively, and its EPS will be 4.97, 7.37 and 9.86 yuan respectively. The corresponding PE of the current stock price will be 29, 20 and 15 times respectively, and the company will be given a “recommended” investment rating.
Risk tips
Downside risk of industry prosperity, risk of product R & D progress falling short of expectations, risk of intensified industry competition, risk of overseas policy changes, etc.
