\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Key investment points
Event: the company released its annual report for 2021. The annual revenue was RMB 11.26 billion, a year-on-year increase of 84.5%, and the net profit attributable to the parent company was RMB 360 million, a year-on-year increase of 89.4%. Among them, Q4 achieved a revenue of 3.79 billion yuan in a single quarter, a year-on-year increase of 99.5%, and the net profit attributable to the parent company was 120 million yuan, a year-on-year increase of 89.2%.
Multi field resonance boosts the rapid growth of performance, and the overseas market is large-scale or improves the gross profit. In 2021, the company merged the module and antenna business. The "module + antenna" achieved a revenue of 11.13 billion yuan, a year-on-year increase of 91.5%, and other businesses achieved a revenue of 130 million yuan, a year-on-year decrease of 56.2%. LTE, lpwa, 5g and vehicle business jointly promoted the revenue growth. In terms of gross profit, the rise in raw material prices led to the company's gross profit margin falling to 17.6% in 2021, a year-on-year decrease of 2.7pp. However, with the continuous transmission of costs to the downstream and the large volume of overseas high gross profit markets, the gross profit is expected to be improved. The annual expense rate of the company decreased, with the sales expense rate of 3.2%, the management expense rate of 2.4% and the financial expense rate of - 0.11%. The comprehensive rate of the three expenses decreased by 0.1pp year-on-year.
R & D investment was further increased and the product matrix continued to expand. In 2021, the company's R & D expenditure was 1.02 billion yuan, a year-on-year increase of 44.6%. The company set up the sixth R & D center in Guilin in 2021, covering China, Europe and North America. High R & D investment has enabled the company to take the lead in technology. In terms of 5g products, the company has sent samples of sub-6ghz module and 5g millimeter wave module; In terms of vehicle modules, the company has launched a new vehicle scale group series based on LTE-A and WiFi 6 technology, and has formed cooperation with Tier1 and vehicle manufacturers around the world; In terms of antennas, the company has launched more than 300 kinds of antenna products, covering 5g, LTE, GNSS and other communication technologies. The leading technical strength and perfect product matrix will be transformed into the strongest moat of the company. According to abiresearch, the market share of the company's cellular communication module will reach 38% in 2021, continuing to lead the cellular module industry.
The two self owned manufacturing centers have been completed this year, with an annual production capacity of 140 million pieces. The company has set up two intelligent manufacturing centers in Changzhou and Hefei. Among them, Hefei intelligent manufacturing center has built 10 production lines and 2 R & D pilot production lines, with an annual output of 45 million pieces. Changzhou intelligent manufacturing center has completed the erection of 15 patch production lines, and the remaining two production lines are expected to be completed this year, with an annual output of 90 million pieces after the completion of production. The efficient automatic intelligent production line and the existing global OEM jointly ensure the stability of the company's supply system and the improvement of production capacity, and lay the foundation for the company's sales expansion.
Profit forecast and investment suggestions. It is estimated that the company's EPS from 2022 to 2024 will be 4.25 yuan, 6.74 yuan and 10.18 yuan respectively, and the corresponding PE will be 34, 22 and 14 times respectively, maintaining the "hold" rating.
Risk warning: the risk that the company's new product research and development is less than expected; The risk of relying on overseas companies for upstream chip supply; Exchange rate fluctuations generate exchange losses and other risks.
