\u3000\u30 Beijing Jingyeda Technology Co.Ltd(003005) 02 Eoptolink Technology Inc.Ltd(300502) )
Event: on April 21, the company disclosed the annual report of 2021. In 2021, the company realized an operating revenue of 2.908 billion yuan, a year-on-year increase of 45.57%; The net profit attributable to the parent company was 662 million yuan, a year-on-year increase of 34.60%; The net profit attributable to the parent company after deduction was 598 million yuan, a year-on-year increase of 30.29%. In the fourth quarter of 2021, the company realized an operating revenue of 889 million yuan, a year-on-year increase of 58.63%; The net profit attributable to the parent company was 197 million yuan, a year-on-year increase of 31.45%. In the first quarter of 2022, the company achieved an operating revenue of 739 million yuan, a year-on-year increase of 18.29%; The net profit attributable to the parent company was 132 million yuan, a year-on-year decrease of 17.81%.
Revenue growth is slightly lower than expected, and cost pressure is prominent in the short term. Benefiting from the development opportunities of data center and 5g network construction, breakthroughs in new product research and development and good progress in market development, the sales revenue of the company’s products in the field of data center continues to grow. Among them, the production capacity of point-to-point optical modules increased by 490000, the output increased by 1.02 million, the sales volume increased by 1.29 million, the operating revenue increased by 898 million yuan, and the gross profit margin was 32.41%, a year-on-year decrease of 4.97 PCT. Due to market development and increased R & D investment, the company’s sales expenses and R & D expenses increased by 21.48% and 27.43% year-on-year respectively in 2021. The company continued to promote the research and development of high-speed optical modules. In the first quarter of 2022, the R & D expenses increased by 108% year-on-year, and the R & D expense ratio increased by 2.15pct, which had a certain impact on the profit performance.
A number of breakthroughs have been made in R & D, and the development of data center and 5g has been promoted. With the rapid growth of cloud computing and big data traffic, the demand and construction of data centers are constantly upgraded, which promotes the growth of the demand for optical module products. With the increase of the number and density of ports, the cost proportion of optical modules in the data center network as the key components of data center network interconnection is also gradually increasing, and the data center has gradually become one of the main application fields of optical modules. According to lightcounting data, the sales of 2021q4 optical modules reached US $2 billion, an overall increase of 37%, of which the sales of Ethernet and WDM optical modules increased by about 40%. The company has made a number of progress in R & D projects such as high-speed optical module, silicon optical module and coherent optical module. At present, the company has successfully developed 25g, 50g, 100g and 200g series optical module products covering 5g front transmission, middle transmission and return transmission, and realized batch delivery. It has successfully launched 800g optical module product series combination, 400g optical module products based on silicon optical solution and 400gzr / Zr + coherent optical module. In terms of 800g optical module products, osfp-dd800g and osfp800g have been launched, which are mainly used in data center, 800g Ethernet, cloud computing network and other scenarios. At the international event OFC in the field of optical communication in 2022, Eoptolink Technology Inc.Ltd(300502) demonstrated the next generation of 800g optical module products, which are based on thin film lithium niobate (tfln) modulator technology and have lower power consumption. With the rapid development of global 5g and data center construction, 800g optical module will become the key in the new round of competition. In the future, the company will further strengthen the R & D and production capacity of relevant high-speed optical modules in the application field of data center, continue to recommend market development, and further improve the competitiveness of the company’s products in the application field of data center.
Acquire Alpine to enhance product competitiveness. In order to implement the vertical integration of the main business and accelerate the R & D and commercial use of silicon optical module, coherent optical module and 800g optical module products, the company’s acquisition of alpineoptoelectronics, Inc., an overseas joint-stock company, is progressing in an orderly manner. Alpine has the R & D and production capacity of optical module, coherent optical module and silicon photon technology in the application field of optical module. Through the high-speed acquisition of optical modules and the expansion of optical module technology, the company will participate in the upstream market and increase the profit rate of optical modules through the expansion of optical module technology. In terms of global layout, after the acquisition, the company will have mature business entities overseas, which is conducive to the global layout of the industry. At present, the review of the Commission on foreign investment of the United States (CFIUS) involved in this transaction has been completed. The transaction still needs to handle the foreign exchange registration of overseas direct investment in the bank designated by the Sichuan Provincial Administration of foreign exchange, and complete the remaining delivery conditions agreed in the transaction agreement. At present, it is being promoted in an orderly manner.
Investment suggestion: we estimate that the company’s operating income in 2022 / 23 / 24 will be RMB 2.908/37.59/4.609 billion, and the net profit attributable to the parent company will be RMB 727/9.75/1.222 billion. We give the company 25 times PE in 2022, give the company a six-month target price of 35.75 yuan, and maintain the “Buy-A” investment rating.
Risk tips: the core technology breakthrough is lower than expected, the acquisition and expansion is lower than expected, the industry competition intensifies the risk, the cost control ability is lower than expected, and the impact of the epidemic is higher than expected
