\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Event:
The company released its 2021 annual report, and achieved an operating revenue of 11.262 billion yuan in 2021, an increase of 84.45% over the same period last year.; The net profit attributable to the parent company was 358 million yuan, an increase of 89.43% over the same period last year; The non net profit deducted was 335 million yuan, an increase of 97.18% over the same period of last year.
Our comments are as follows:
1. The expansion of downstream new fields + new products has ushered in harvest, the internationalization process has been steadily promoted, and the income can be expected to increase continuously
The growth of the company's operating revenue has accelerated, and the development of overseas markets has made gratifying progress. The company's operating revenue increased by 84.45% in 2021, including overseas business revenue of 4.97 billion yuan (+ 113.27%), and the internationalization process was steadily promoted. The growth rate of the company's revenue was significantly higher than that in 2020 (+ 47.85%), of which Q4 achieved an operating revenue of 3.786 billion yuan (+ 99.49%), a record high.
Specifically: 1) the company's module + antenna business achieved an operating revenue of 11.135 billion yuan (YoY + 91.48%) in 2021. The high growth is mainly due to the rapid growth of LTE, lpwa, 5g and vehicle business. The company will continue to cultivate 5g module products in 2021, and has the first mover advantage in the industry; The company continues to make efforts in the vehicle end, launching a variety of 5g vehicle specification level modules and WiFi vehicle specification level modules to enrich the layout of the vehicle field. At the same time, the company continues to improve the type of antenna products, and a variety of new products have been applied. 2) In terms of other businesses, the classification was adjusted in 2021, with a revenue of 127 million yuan (yoy-56.20%), mainly due to the stripping of antenna business. Other businesses include cloud platform, smart city, technical service fee, etc. at present, new businesses have achieved initial results.
2. Under the pressure of cost, the net interest rate has increased, and we actively look forward to the improvement of the company's profitability under the decline of raw material prices
On the cost side, the company's gross profit margin in 2021 was 17.56%, down 2.67pp from 2020. The rise in the price of upstream raw materials put pressure on the company's cost side. We are actively looking forward to the recovery of the company's gross profit margin after the price of upstream raw materials stabilizes and falls. On the cost side, the scale effect of the company is obvious, and the cost control has begun to take effect. When the gross profit margin has declined compared with 2020, the net profit margin is 3.18%, an increase of 0.08pp compared with 2020. Among them, the sales expense was 361 million yuan, with a year-on-year increase of 82.24%; The management fee was 266 million yuan, with a year-on-year increase of 44.62%; The financial expenses were - 12.45 million yuan, and the exchange income decreased compared with the same period of the previous year. We believe that the pressure on the cost side of the company is expected to gradually reduce in the future. Under the continuous cost control on the cost side, the profitability of the company is expected to improve and drive the rapid growth of performance.
3. Under the high prosperity of the industry, the scale continues to grow, and the company's share is expected to continue to increase, benefiting fully
Looking forward to the future, the company's Internet of things share is expected to continue to increase rapidly, and the scale effect is expected to continue to appear under the trend of high income growth: 1) in the past few years, the company's revenue growth rate has been significantly higher than the industry growth level, and its market share has increased significantly in recent years. According to the 2021q4 cellular module shipment share data released by counterpoint Quectel Wireless Solutions Co.Ltd(603236) consolidate its global leading position; 2) The company has rich product series and strong competitiveness of 4G & 5g products, which has a leading advantage under the continuous iteration of network system in the future; 3) The company continues to lay out new products and businesses. The company has launched a variety of new antenna products and established long-term strategic cooperative relations with customers in high-end markets at home and abroad. At the same time, we actively carry out ODM business, and have provided PCBA solutions for head customers in PDA, POS payment, shared travel and other industries, so as to improve the stickiness of head customers in the module industry. 4) The company has a wolf culture, focuses on research and development and sales, and actively promotes the globalization strategy. Its business covers more than 150 countries and regions, and its sales channels are all over China, Europe, North America, Asia, Africa and Latin America. The R & D end of the company provides the basis of technical capability, and the sales end actively develops the global market to inject power into the sustainable growth of the company.
Profit forecast and investment suggestions: benefiting from the rising volume and price of Internet of things modules, the industry demand continues to be strong. Quectel Wireless Solutions Co.Ltd(603236) as a leader in the industry, it has obvious competitive advantages, or will fully enjoy the dividends of the Internet of things industry. At the same time, the company continues to layout new products and businesses, and the sales side continues to expand the market with strong growth momentum. It is estimated that the net profit attributable to the parent company from 22 to 24 years is 611 million yuan, 915 million yuan and 1.241 billion yuan, corresponding to the PE of 22 years / 23 years is 35x / 23x, and the "overweight" rating is reiterated.
Risk tips: the expansion of new fields is less than expected, the risk of continuous price rise of upstream raw materials, the risk of intensified industry competition affecting profitability, the risk of less than expected penetration of the Internet of vehicles, etc
