\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Key investment points
Announcement summary: the company released its annual report for 2021, and achieved an operating revenue of 11.262 billion yuan in 2021, with a year-on-year increase of 84.45%; The net profit attributable to the shareholders of the listed company was 358 million yuan, a year-on-year increase of 89.43%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 335 million yuan, a year-on-year increase of 97.18%; It is proposed to increase 3 shares with capital reserve for every 10 shares and distribute a cash dividend of RMB 7.40 (including tax).
The high volume of products drives the high growth of revenue, and the inflection point of net interest rate appears. The company's Q4 revenue was 3.786 billion yuan, with year-on-year and month on month growth rates of 99.49% and 19.78% respectively, and the net profit attributable to the parent was 121 million yuan, with year-on-year and month on month growth rates of 89.26% and 17.11% respectively. The high growth of annual revenue mainly benefited from the rapid increase of business volume such as LTE, lpwa, vehicle and 5g modules. The sales volume of modules was 175 million, with a year-on-year increase of 54.32%. The revenue growth of vehicle, intelligent security, gateway, wireless payment, laptop and other application fields accelerated. In terms of regions, the growth of the company's overseas business accelerated during the reporting period, with a significant year-on-year increase of 13.27% to 4.97 billion yuan, accounting for 5.96 PCT to 44.13%, and China's revenue increased by 66.66% to 6.292 billion yuan. In terms of sales model, tmall flagship store online sales channels were added in 21 years to better serve small and medium-sized customers. The online revenue was 8.2385 million yuan, a year-on-year increase of 340.79%. In terms of profitability, affected by the tight supply of upstream raw materials and rising costs in 21 years, the gross profit margin was 17.56%, down 2.67pct year-on-year, of which the gross profit margin in Q4 was 15.75% in a single quarter and decreased by 3.3pct month on month. The net interest rate was 3.18%, a slight increase of 0.09pct year-on-year, a net interest rate of 2.98% after deduction, and a year-on-year increase of 0.19pct, reflecting the company's good ability of expense control. The expense rate during the 21-year period was 14.53%, a year-on-year decrease of 2.64pct, of which the sales expense rate / management expense rate / financial expense rate were 3.20% / 2.36% / - 0.11% respectively, with a year-on-year change of -0.04pct / - 0.65pct/0.55pct. The company responded to the rising cost by strengthening internal management and actively preparing goods, At the end of the reporting period, the inventory was 2.699 billion yuan, with a year-on-year increase of 87.65%. It is expected that the profitability of the company will be gradually improved under the positive factors such as scale effect, optimization of product structure, promotion of overseas high gross profit market expansion and price transmission measures. According to the announcement, the net interest rate of the company from January to February of 22 was about 3.51%, with a significant increase.
R & D investment continued to increase and accelerate the layout of new businesses. The company invested 1.022 billion yuan in R & D in 21 years, with a year-on-year increase of 44.62% and a R & D expense rate of 9.08%. By the end of 21, the company had 2997 R & D personnel, with a year-on-year increase of 26.67%, accounting for 72.97%. It has obtained more than 300 authorized patents and trademarks, and participated in the formulation of 5g general module industrial standards and 3GPP international standards. Guilin R & D center was newly established in 21 years to improve technological innovation ability and provide localized services for customers and projects in South China. At present, the company has 6 R & D centers covering China, Europe and the United States, helping the international development strategy. The company continued to enrich the module product portfolio, covering Qualcomm, zhanrui, MediaTek and other platforms, launched the second generation 5gnr communication module sub-6ghz module and millimeter wave module series supporting 3gppr16 protocol, and successively entered the engineering sample stage in September. The new generation flagship sg865w-wf intelligent module, sg500q-cn integrating 5g and AI technology, and the first lpwa module bp770a-gl based on SIP packaging, ultra-low power consumption and ultra-small size Support wi-fi6 + BT5 2's high-speed dual band WiFi module fc64e, GNSS high-precision timing module lc98s and other new products meet the needs of wearable, payment, CPE and other scenes. New businesses such as antenna, cloud platform of Internet of things, ODM and digital integration of smart city continue to be promoted. By the end of 21, more than 300 antenna products such as 5g and GNSS have been launched, which are widely used in two wheeled vehicles, smart industry, power industry and other fields. The self-developed Internet of things cloud platform queicloud has built many product lines, such as smart travel, smart power consumption, smart factory and so on. ODM service has provided PCBA solutions for industry head customers such as PDA, POS payment, shared travel and BMS, and cooperated with cloud service and antenna to provide overall solutions for the second round of intelligent travel.
Production expansion strengthened the scale effect, and 5g and vehicle business were promoted smoothly. The company has a solid leading position in the industry. According to ABI research, the company's shipping market share in M2M cellular module suppliers reached 38% in 2021. The company has actively expanded production capacity, upgraded some automatic production and testing lines and improved the efficiency of production lines. It has set up its own intelligent manufacturing centers in Changzhou and Hefei, and established OEM cooperation in Malaysia, Brazil, Suzhou, Dongguan and other places around the world. By the end of 21, Hefei intelligent manufacturing center had 10 production lines and 2 R & D and pilot production lines, with an annual output of 45 million pieces, Changzhou intelligent manufacturing center is expected to reach 90 million pieces / year after the full production. 15 module patch production lines have been completed, and the other 5 are expected to be completed in 22 years. The expansion of production will further improve the company's market share and highlight the scale effect. The company's certification covers the world and provides products and technical services to more than 8500 customers outside China. During the reporting period, 5g and vehicle module business were mainly arranged. 5g formed a first mover advantage, won the bid for China Mobile 5g general module project with the largest share of nearly 50%, supported the implementation of more than 1000 end customer projects, and met the needs of industrial Internet, FWA, mobile computing, private network and other scenarios. In vehicle module, the company provides product mix based on different vehicle level platforms. It has launched a number of vehicle module modules, such as L TE-A, 5GNR, 5GNR+NRV2X, Wi-Fi6, and the Android intelligent module based on Qualcomm chip, which can meet the requirements of 360 round looking, OMS/DMS, AR navigation and so on. During the reporting period, ASPICECL2 is evaluated, and the intelligent Internet union automotive software development capability is ahead of the world. At present, it has formed cooperation with more than 35 well-known OEMs and more than 60 Tier1 manufacturers around the world, and the number of fixed-point projects continues to increase. In the future, it will fully benefit from the improvement of the penetration of intelligent network connected vehicles and the expansion of Internet of things application scenarios.
Investment suggestion: Quectel Wireless Solutions Co.Ltd(603236) is the global leader in cellular Internet of things modules, with the overall market share increasing rapidly. The product matrix is expanded from cellular modules to WiFi & BT modules, antennas and cloud platform services. With the scale effect of capacity expansion, the scale of revenue maintained rapid growth. It is estimated that the net profit of the company from 2022 to 2024 will be 547 million yuan / 808 million yuan / 1231 million yuan, corresponding to EPS of 3.77 yuan / 5.56 yuan / 8.47 yuan, maintaining the "buy" rating.
Risk warning: industry competition intensifies the risk; The development of Internet of things is less than expected risk; Risk of price rise of upstream chip raw materials; The public materials used in the research report may have the risk of information lag or untimely update.
