\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Core view:
The business volume of communication module increased strongly, and the marginal performance in 2021 was good. In 2021, the company's revenue reached 11.262 billion yuan, a year-on-year increase of 84.45%; The net profit attributable to the parent company was 358 million yuan, with a year-on-year increase of 89.43%, and the operating performance maintained a good growth trend. The revenue growth was mainly due to the increase of business volume of LTE module, lpwa module, vehicle module and 5g module; The obvious increase in sales revenue of downstream areas in vehicle, intelligent security, gateway, wireless payment, PC and other fields. During the reporting period, the company's overseas business and personnel scale continued to expand, and the R & D investment continued to increase. At the same time, the company increased the preparation of raw materials, which comprehensively led to the increase of operating cash flow. In addition, the decline in gross profit margin was due to the increase in the price of upstream raw materials.
The high prosperity of the Internet of things drives the strong demand in the downstream, upholds the integrity and innovation, and sets a benchmark for the module industry. In 2021, the company's shipping market share in M2M cellular module suppliers reached 38%. With the continuous emergence of downstream application scenarios, the company's market share is expected to be further improved. The annual revenue of wireless communication module business was 11.135 billion yuan, an increase of 91.48% year-on-year. While maintaining the high growth of module business, the company actively explored new business development. The company continues to enrich and improve the types of antenna products, has launched more than 300 kinds of antenna products, and achieved a rapid breakthrough in sales; Based on the queicloud Internet of things cloud platform, the company helps enterprises realize intelligent scenarios; Smart city digital integration business has made a rapid breakthrough in tog / B, and government enterprises have formed a long-term cooperative relationship. The company's module business is expected to make continuous breakthroughs and actively develop new businesses, and its operating performance is expected to maintain a marginal positive trend.
High performance growth helped to repair the valuation and gave it a "recommended" rating. While maintaining a high growth in module business, the company promotes the development of new business. The company's financial condition is good, its profitability continues to improve, and its future performance and valuation are expected to rise. According to the company's 2021 annual performance report, we give the company the predicted net profit attributable to the parent company from 2022e to 2024e of 16.138 billion yuan, 20.936 billion yuan and 29.163 billion yuan, corresponding to EPS of 4.16 yuan, 6.47 yuan and 9.50 yuan, and corresponding PE of 35.15 times, 22.61 times and 15.38 times. Combined with the leading position of the company's communication module and strong performance growth, the company is given a certain valuation premium and a "recommended" rating.
Risk warning: the impact of the global epidemic and the uncertainty of China's foreign policy and macro-economy; Supply chain risk of core components; Upstream price rise; Market competition intensifies, and the market promotion of new products is less than expected.
