\u3000\u30 Beijing Jingyeda Technology Co.Ltd(003005) 02 Eoptolink Technology Inc.Ltd(300502) )
Event overview: on April 21, 2022, the company released the annual report of 2021 and the first quarterly report of 2022. In the whole year of 2021, the company achieved an operating revenue of 2.908 billion yuan, a year-on-year increase of 45.57%, a net profit attributable to the parent of 662 million yuan, a year-on-year increase of 34.60%, and a deduction of non attributable net profit of 598 million yuan, a year-on-year increase of 30.29%. In the first quarter of 2022, the operating revenue was 739 million yuan, a year-on-year increase of 18.29%, and the net profit attributable to the parent company was 132 million yuan, a year-on-year increase of 17.81%.
Driven by the high prosperity of the data communication optical module market, the company has performed well in 21 years: in terms of revenue, the company achieved a revenue of 2.908 billion yuan in 2021, a year-on-year increase of 45.6%. Among them, the proportion of overseas revenue increased from 55.5% in 2020 to 78.2% in 2021. The demand of overseas major customers built the main driving force of the company’s performance growth, while China’s demand growth slowed down due to the relatively weak telecom market. Looking forward to 2022, the basic expenditure of cloud computing giants represented by meta is expected to see further growth, so the demand for logarithmic optical modules is expected to remain high. In terms of profit, the net profit attributable to the parent company in 2021 was 662 million yuan, with a year-on-year increase of 34.6%. We believe that its growth rate is lower than the revenue growth rate, which is mainly due to the decline of gross profit margin caused by product structure adjustment (from 36.86% to 32.17%). With the large demand for digital communication modules from overseas major customers, the proportion of revenue of digital communication modules has increased significantly, but its gross profit margin is slightly lower than that of high-end Telecom Optical module products. In the future, with the stabilization of the product structure in the composition of revenue, we expect the gross profit margin to remain stable.
Increase investment in research and development, and the growth rate of short-term 22q1 performance fluctuated slightly: 22q1 company achieved a revenue of 739 million yuan, a year-on-year increase of 18.29%, and the net profit attributable to the parent company was 132 million yuan, a year-on-year increase of 17.81%. Among them, R & D expenses increased from 17.73 million yuan in the same period last year to 368.3 billion yuan, a sharp increase of 107.8% year-on-year. The increase in exchange losses also led to an increase of about 7.25 million yuan in financial expenses compared with the same period last year.
Focusing on the long-term, the company has made efforts to lay out multiple emerging fields and open up space for future growth: in terms of 800g, the company has a rich product matrix and has 800g products based on EML and silicon optical solutions. At the OFC conference in March 2022, the company released a new generation of industry-leading low-power 800g optical modules. The products are based on thin-film lithium niobate modulator technology, which guides the possible direction of the industry in the future. In terms of coherence, with the continuous sinking of coherence technology, coherent optical modules will usher in a period of rapid development. The company began to enter the market this year and released two 400g coherent products with transmission distances of 120km and 480km respectively. Both products adopt optical engines based on silicon photonics and the latest generation of digital signal processors supporting 400g coherent transmission. In the field of silicon light, the company has successfully launched 400g optical module based on silicon light scheme, and the acquisition of alpine, an overseas joint-stock company, is also continuing. We believe that the company is starting to transform from a prominent position of cost control ability to a leading technology, and is expected to fully seize the development opportunities brought by technological changes in the industry in the future.
Investment suggestion: we expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 818 / 1054 / 1255 million respectively, and the corresponding PE multiple is 14x / 11x / 9x. As the head enterprise of optical module, the company will fully benefit from the demand of data communication market and telecom market. At the same time, with the accelerated layout in the fields of coherence, 800g and silicon light, it is expected to further open the growth space in the future. Maintain a “recommended” rating.
Risk tip: the market demand of telecom / digital communication is lower than expected, the industry competition intensifies, and the price of optical module decreases greatly
