\u3000\u3 Guocheng Mining Co.Ltd(000688) 608 Bestechnic (Shanghai) Co.Ltd(688608) )
Event:
The company released its annual report for 2021, realizing an operating revenue of 1.765 billion yuan, a year-on-year increase of 66.36%; The net profit attributable to the parent company was 408 million yuan, a year-on-year increase of 105.51%; Net profit deducted from non parent company was 294 million yuan, with a year-on-year increase of 71.93%. Affected by the price rise of the upstream supply chain, the operating cost of the company in 2021 was 1.107 billion yuan, with a year-on-year increase of 74.02%. The comprehensive gross profit margin in 2021 was 37.29%, down 2.76 percentage points from 2020..
Comments:
The annual performance increased rapidly, and the new business line grew rapidly: the company had excellent performance in 2021, with a significant year-on-year increase. In terms of business, the revenue of the company’s traditional advantageous products ordinary Bluetooth chip and intelligent Bluetooth chip increased by 40.72% and 72.05% respectively year-on-year; Other chips increased significantly by 96.65% year-on-year, mainly including products such as smart home WiFi SOC chip, smart watch chip and type-C chip, with revenue accounting for about 20%. As the sales scale of type-C chips has continued to decline in recent years, accounting for a small proportion of revenue, WiFi SOC and smart watch chips in this business have contributed faster year-on-year growth, and the company’s new business lines have accelerated growth.
Smart Bluetooth SOC keeps ahead and launches new products with high integration: the company maintains rapid iteration ability on Bluetooth audio chip. Bes2500 series main control chip has been widely used in terminal headset products of mobile phone manufacturers, professional audio manufacturers and e-commerce brands. With the increasing integration requirements of TWS headset applications and the gradual improvement of the embedding requirements of various sensors, the company took the lead in launching the bes2600 series of intelligent Bluetooth audio chip “Bluetooth + noise reduction + in ear detection” in the industry in the second half of 2021, and took the lead in realizing the single-chip solution of full integration of human body detection, audio and RF, It has further improved the company’s technical barriers in the process of miniaturization and high integration of TWS headphones, and the chip has been successfully mass produced among brand customers.
Huawei has successfully expanded its application in the smart home market by adopting the Advanced Bluetooth technology of the second generation of smart home appliances, such as smart home appliances and smart home appliances. Huawei has taken the lead in expanding the power consumption of smart home appliances, such as smart home appliances, smart home appliances, etc. with the help of Huawei’s smart home appliances, smart home appliances and smart home appliances Smart appliances and other fields.
In the field of smart watches, the company’s first generation smart watch chip was successfully introduced into customers and mass produced in 2021. The chip integrates display, storage, audio and connection, and supports BT5 2 dual mode Bluetooth, which can support ble data transmission, Bluetooth call and music playback. The company’s second-generation smart watch single-chip solution, 12 nm bes2700bp, has also entered the sample delivery stage and is expected to be introduced to the market in 2022.
Increase R & D efforts and master a number of core technologies in the field of Wireless SoC: the company continues to pay attention to R & D investment, continuously improve its core technology capabilities, and maintain a high level of R & D investment for a long time. In 2021, the company’s R & D expenditure was 289 million yuan (YoY + 67.51%), accounting for 16.38% of revenue. By the end of 2021, the company had 338 R & D personnel, an increase of 140 over the end of the previous period.
The company achieved rich R & D achievements during the reporting period. In addition to the highly integrated bes2600 series TWS earphone chip, the company’s bes2700 series single chip integrates multiple armcpus, audio and image codec DSPs, 2.5dgpu applied to image and graphics conversion acceleration, wearable low-power display system controller and neural network acceleration coprocessor, and takes the lead in adopting the latest ARM embedded CPU core M55, which greatly improves the ability of digital signal processing and machine learning. The second generation dual-mode SOC chip for the aiot market integrates multi-core MCU and AP subsystem, embedded speech recognition system, WiFi / Bluetooth subsystem, etc. with more advanced process, it can support stronger AI computing power and lower power consumption. The company continues to invest in the WiFi track and has developed a WiFi connection chip supporting the latest WiFi 6 protocol 802.11ax. The chip supports the highest rate mcs11 of WiFi 6, 1024qam modulation and demodulation, and 2.4GHz and 5.8GHz dual band transceiver, and can support the maximum bandwidth to 80MHz. It can not only meet the WiFi upgrade of Internet of things devices, but also be applied to all kinds of audio and video terminals with greater demand for data traffic, such as TV, tablet, notebook, etc.
Profit forecast, valuation and rating: the company is a global leading manufacturer in the field of intelligent Bluetooth audio. It has accumulated profound experience in audio and Wireless SoC chip design. We are optimistic about the long-term development advantages brought by the company’s leading technical strength. At the same time, considering the slowdown of TWS headset market, we lowered the net profit attributable to the parent company in 2022 and 2023 to 622 million yuan (- 19%) and 899 million yuan (- 19%), which were originally predicted to be 766 million yuan and 1.11 billion yuan, and added the performance forecast for 2024. We estimate that the company’s operating revenue from 2022 to 2024 will be RMB 2689 / 3862 / 4887 million respectively, and the net profit attributable to the parent company will be RMB 622 / 899 / 1152 million respectively. The current market value corresponds to 30 / 21 / 16 times of PE, maintaining the “buy” rating.
Risk tip: the demand for TWS headphones is lower than expected, the demand for smart watches is lower than expected, and the industry competition is intensified.
