\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Event: the company released its annual report for 2021. In 2021, the company realized an operating revenue of 11.262 billion yuan, a year-on-year increase of 84.45%; The net profit was 358 million yuan, a year-on-year increase of 89.43%.
Comments:
R & D investment in module products, 5g + vehicle continues to take the lead. In terms of 5g modules, in February 2021, the company took the lead in launching the second-generation 5gnr communication modules supporting 3gppr16 protocol - sub-6ghz module rx520f series, rx520n series and millimeter wave module rm530n and rg530f series, and successively entered the engineering sample stage in September to support customers in many industries in terminal design. In August 2021, China Mobile released the announcement of the successful candidates of 5g general module product suppliers, and Quectel Wireless Solutions Co.Ltd(603236) five 5g modules won the bid with the largest share, accounting for nearly 50%. We believe that this large share of the bid fully verifies the leading strength of the mobile 5g module in product richness, performance stability and maturity. In terms of on-board modules, Quectel Wireless Solutions Co.Ltd(603236) based on new technologies and new platforms, continues to provide a rich and powerful on-board product portfolio. The newly launched LTE-A vehicle scale group ag519m supports the vehicle scale groups ag56xn and ag57xq of 5gnr and 5gnr + nrv2x, which meets the needs of customers with increasingly rich Internet of vehicles ecology and balanced supply chain. In 2021, the company's R & D investment reached 1.022 billion yuan, accounting for 9.08% of the operating revenue, with a year-on-year increase of 44.62%. The company has 2997 R & D personnel, accounting for 72.97%.
Downstream application scenarios continue to emerge, and the market space continues to grow. According to the forecast data of abiresearch 2021q3, the number of Internet of things connections is expected to reach 23.1 billion by 2026. In addition, according to the latest data of ABI research in 2002, Quectel Wireless Solutions Co.Ltd(603236) in 2021 accounted for 38% of the shipping market share of M2M cellular module suppliers. According to Ericsson's "Ericsson mobility report" in November 2021, the number of IOT terminal connections using cellular communication will exceed 5 billion in 2027. Among them, 2G and 3G will gradually withdraw, while the coverage of Nb IOT, cat-m, 4G and 5g will continue to increase.
The growth rate of nuclear income in the college entrance examination is 22-27%, demonstrating the compound growth target of nuclear income in the year of college entrance examination. According to the stock option incentive plan issued by Quectel Wireless Solutions Co.Ltd(603236) , the performance assessment target of the equity incentive is the operating revenue. The operating revenue from 2022 to 2025 shall not be less than RMB 14.9/193241/30.2 billion respectively, with a corresponding year-on-year growth rate of not less than 33% / 30% / 25% / 25%, and a compound growth rate of 27% + from 2022 to 2025. We believe that the setting of this goal demonstrates the company's confidence in long-term development and ensures the realization of the company's future development strategy and business objectives.
Profit forecast, valuation and rating: the company bears certain pressure on the cost of upstream raw materials. We adjusted the net profit forecast of the company from 2022 to 2023 to RMB 505 / 682 million, which is - 6.31% / - 10.62% compared with the previous adjustment. The net profit forecast of the new company in 2024 is RMB 868 million, corresponding to pe42 / 31 / 24x. We are optimistic about the company's long-term development prospects and maintain the "overweight" rating.
Risk warning: competition intensifies risk; The industrial chain is blocked and the risk of exchange rate fluctuation.
