\u3000\u30 Beijing Jingyeda Technology Co.Ltd(003005) 02 Eoptolink Technology Inc.Ltd(300502) )
Event overview
The company released the 2021 annual report and the 2022 first quarter report. In 2021, the company achieved a revenue of 2.908 billion yuan, an increase of 45.57% year-on-year; The net profit attributable to the parent company was 662 million yuan, a year-on-year increase of 34.60%; The net profit deducted from non parent company was 598 million yuan, with a year-on-year increase of 30.29%.
Analysis and judgment:
Benefiting from the high outlook of the overseas digital communication market, the company’s performance grew rapidly, the output scale expanded, and the gross profit margin decreased. Thanks to the continuous capital expenditure of data center operators and the enhanced cooperation with customers in the telecom market outside China, the company’s operating revenue increased explosively in 2021. In 2021, the company achieved a revenue of 2.908 billion yuan, a year-on-year increase of 45.57%; The gross profit margin was 32.41%, with a year-on-year decrease of 4.98pct. The net profit attributable to the parent company was 662 million yuan, a year-on-year increase of 34.60%.
Compared with the same period of last year, the company produced 7.56 million point-to-point optical modules in 2021, with a year-on-year increase of 1.02 million and a sales volume of 7.79 million, with an increase of 1.29 million. Among them, the overseas sales volume was 4.55 million, and the revenue was 2.243 billion yuan, which doubled year-on-year (YoY + 105.91%), and the gross profit margin was 33.12%, a year-on-year decrease of 4.34pct; China achieved a revenue of 597million yuan, a year-on-year decrease of 29.97%, and a gross profit margin of 29.73%, a year-on-year decrease of 7.55pct. The company’s 400g shipments in North America continued to grow month on month, and the overseas digital communication market continued to have a high outlook. Benefiting from this, the company’s performance achieved month on month improvement and rapid growth.
In 2022q1, the company achieved a revenue of 739 million yuan, with a year-on-year increase of 18.29% and an overall gross profit margin of 33.12%, slightly higher than the same period last year. We believe that the overseas digital communication market is expected to maintain a high outlook in 2022, driving the company’s overseas performance to continue to improve, the business structure to continue to optimize, and the overall gross profit margin is expected to stabilize.
The overall cost remained stable, continued to increase R & D investment, and actively distributed the silicon light field
Expense side: the company’s sales / management / R & D / financial expense rates in 2021 were 1.23% / 1.17% / 3.73% / – 0.26% respectively, and the expense rates decreased, mainly due to the rapid growth of overall revenue, in which the R & D expense rate decreased by 0.53pct year-on-year. In 2022q1, the R & D expense rate increased significantly to 4.99%. The company continued to increase R & D investment, and acquired alpine, an overseas joint-stock company, to deeply layout the technical fields of silicon optical modules, coherent optical modules and silicon photonic chips, and successfully launched 800g optical module product portfolio and 400g optical module products based on silicon optical solutions in 2021. It is one of the few enterprises in China to deliver 100g optical modules and 400g optical modules in batches and master high-speed optical device chip packaging and optical device packaging. The company has continuously strengthened cooperation with mainstream equipment manufacturers and Internet manufacturers, promoted global layout through the acquisition of overseas joint-stock companies, and deeply participated in the market competition of silicon optical module, coherent optical module and silicon photonic chip technology, so as to further enhance the competitiveness of the company in the optical module industry.
Strengthen the control of order expectation and preparation cycle, and actively prepare goods to resist the influence of upstream uncertain factors
Asset side: the inventory in 2021 increased by 57.05% compared with the beginning of the period to reach 1.526 billion yuan, and Q1 in 2022 reached 1.665 billion yuan, reaching the highest level in history. The company comprehensively considered the on hand and expected orders and preparation cycle to enhance the preparation of upstream raw materials. In the context of international trade disputes and uncertain factors of the epidemic, the company comprehensively considered the orders on hand and actively increased the stock. Under the background of “chip shortage”, the price rise of upstream raw materials did not have an impact on the profit side. In addition, due to the continuous volume of overseas digital communication optical modules, the company achieved rapid growth in revenue and profit in 2021. We believe that with the continuous increase of Q1 stock in 2022 and the continuous high outlook overseas, the company’s overseas business is expected to maintain sustained and rapid growth in 2022.
Developing its own advantages and conforming to the market trend, the prospect of high-speed optical module is promising
High speed optical module business continues to grow at a high speed: the company is one of the few enterprises in China that can deliver 100g optical modules and 400g digital communication optical modules in bulk, and master high-speed optical device chip packaging and optical device packaging. It has successfully developed 200g and 400g module products and successfully produced 800g optical module product portfolio based on EML and siph solutions.
The market trend is high vision. The layout of 800g and silicon light strengthen the market leading advantage: the high vision of the data center market brings new market opportunities to the optical module industry. The expansion and iterative upgrading of the data center has a strong demand for 400g optical modules + the recovery of 5g construction speed in China. Driven by two wheels, combined with the company’s own technology and product advantages, the growth of high-speed optical modules remains high. At the same time, the company acquired Alpine silicon photonic technology platform, strengthened the layout of silicon optical field, and released 800g product portfolio, which is expected to continue to maintain a leading edge in the subsequent higher speed and silicon optical technology iteration.
Investment advice
Optimistic about the growth of the company’s high-speed optical module business and raised the profit forecast. It is expected that the company’s revenue from 2022 to 2024 will increase from RMB 36.35/43.84/n/a to RMB 38.58/50.03/6.490 billion respectively, the corresponding earnings per share will increase from RMB 1.47/1.62/n/a to RMB 1.61/2.03/2.54 respectively, and the corresponding closing price of RMB 23.13/share on April 22, 2022 will be 14.32/11.37/9.12 times respectively, maintaining the “overweight” rating.
Risk tips
The demand for 5g and data center slows down, the company’s revenue decreases and the inventory price drops; Exchange rate fluctuation risk; Overseas business risks caused by international trade disputes and policy uncertainty; Unfavorable market expansion of new products, etc.
