\u3000\u3 Guocheng Mining Co.Ltd(000688) 608 Bestechnic (Shanghai) Co.Ltd(688608) )
Event: the company released the 21st Annual Report.
The sales revenue of each product continues to grow, and the recovery of gross profit margin is expected. The company achieved a revenue of 1.77 billion yuan in 21 years, an increase of 66%; The net profit attributable to the parent company was 410 million yuan, an increase of 106%. The substantial growth of performance benefits from the continuous growth of smart wearable and smart home market driven by technological innovation. With the support of customer demand and deep understanding of products and technology, the sales volume of the company's products continues to grow and the market position is further consolidated. At the same time, under the background of repeated epidemics and tight production capacity supply, the company's gross profit margin gradually stabilized, with a single quarter gross profit margin of 37.2% in the 21st Q4, an increase of 1PCT month on month, reversing the downward trend in the past few quarters. With the continuous improvement of the value of the company's products, the gross profit margin is expected to pick up.
TWS headphones are in the ascendant, and "technology + customer" barriers are high. According to canalys data, the global shipment of TWS headphones increased by 15% to 294 million pairs in 2021. The industry has an obvious trend of intelligence and branding. According to counter point data, the sales proportion of TWS earphones above $200 has increased from 14% in 20 years to 16% in 21 years. At the same time, counter point data shows that the sales share of airpods has decreased from 30.2% in 20 years to 25.6% in 21 years. Hengxuan focuses on brand customers, realizes the full coverage of mainstream Android customers such as Huawei, Samsung and Xiaomi, and supplies third-party brand manufacturers such as JBL, which will fully benefit from the increase in the share of non-a-series terminal customers. In the second half of the year, the company took the lead in launching the three in one intelligent Bluetooth audio chip of "Bluetooth + noise reduction + in ear detection" and mass production, realizing the single-chip solution of full integration of human body detection, audio and RF, and further improving the technical barriers of the company in the process of miniaturization and high integration of TWS headphones. The new generation of wearable master chips developed by the company based on TSMC's 12NM process have been successfully streamed, and have entered the sample delivery stage, which is expected to promote the increase of revenue and price.
Deeply cultivate the smart wearable and smart home market, and gradually implement differentiated new products. In the field of smart home, the company has successfully expanded customers such as Xiaomi, Alibaba and Huawei. The second-generation WiFi / Bluetooth dual-mode aiotsoc chip has been mass produced and listed. It adopts 22nm process, supports stronger AI computing power and lower power consumption, and takes the lead in supporting the smart home of Hongmeng operating system. In addition to being applied to smart speakers, it can also be widely used in smart home appliances as an intelligent voice module. In the field of smart watches, the company's first generation chips have been successfully introduced into Huawei, Xiaomi, vivo and other customers and mass produced. The second generation 12NM process master chip has also entered the sample delivery stage. It is expected to be introduced to the market this year, which is expected to further improve the integration and power consumption advantages of watch master chip and drive the improvement of ASP.
Profit forecast and investment suggestions
We predict that the company's earnings per share for 22-24 years will be 5.12/7.53/11.01 yuan respectively (the original forecast for 22-23 years is 5.24/7.84 yuan, mainly adjusting the business revenue and gross profit margin and raising the investment income according to the annual report). According to the comparable company's 23-year 28 times PE valuation level, the corresponding target price is 210.84 yuan, maintaining the buy rating.
Risk tips
The sales volume of brand TWS earphones is lower than expected, the sales volume of smart speakers and smart watches is lower than expected, the sales volume of 12NM new products is lower than expected, the price rise of Wafer Factory is higher than expected, and the pressure of transferring cost to the downstream is lower than expected.
