\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 19 Shenzhen Microgate Technology Co.Ltd(300319) )
Core view
The performance has increased rapidly, and the gross profit margin has increased year by year. The company achieved a revenue of 3.32 billion yuan in 2021, a year-on-year increase of 42%; The net profit attributable to the parent company was 300 million yuan, with a year-on-year increase of 752%; The net profit deducted from non parent company was 260 million yuan, which was significantly improved over the previous year. Benefiting from the wave of industrial upgrading and localization substitution, coupled with the profound accumulation of the company, the annual revenue and profit reached a record high. The gross profit margin increased against the trend in the complex external environment, with the annual gross profit margin of 21.1% and a year-on-year increase of 2.4pct. Among them, the gross profit margin of electronic components increased by 3.6pct to 32.3% year-on-year. The increase of scale effect and yield drove the gross profit margin of SAW filter to improve significantly. The continuous volume of integrated inductors was superimposed to drive the overall gross profit margin upward.
Integrated inductors continue to grow in large quantities, and the product structure and application fields grow simultaneously. Relying on high-end inductors and other magnetic components and RF devices such as filters, the headquarters of the company achieved a sales revenue of 1.03 billion yuan, a year-on-year increase of 27%, and a net profit of 230 million yuan, a year-on-year increase of 160%. Integrated core products, high-end inductors such as inductors, precision wound inductors and common mode inductors continued to increase in volume, forming a scale effect, and successfully increased the sales proportion of medium and high-end products. According to the data of China electronic components industry association, the scale of China’s inductance market will reach 41 billion yuan in 25 years, and the compound annual growth rate of 20-25e will be 8%, of which local inductance enterprises will account for nearly 7%. The company continues to develop high-current, high-power and low-power integrated inductors suitable for power management needs at the consumer electronics end. At the same time, it actively develops the market of intelligent Internet of things, high-end servers and automotive electronics, gradually improves product specifications and applications, aims at domestic substitution opportunities and welcomes the increase of share.
The filter product line continues to make breakthroughs in high-end and diversified development. According to the data of qyreelectronics Research Center, the global RF filter market will reach US $21.9 billion in 23 years, and the average annual compound growth rate of 18-23e is as high as 21%. The company is a rare enterprise in China that produces saw, duplexer and LTCC filters at the same time, and its product yield is leading in China. In the past 21 years, the company’s shipments of LTCC and SAW filters have increased significantly, the gross profit margin of main products has been stable, and the company has successfully broken through the high value-added RF module products. The diffem applied to 4G has been supplied, and the l-fem developed for 5g has also passed the certification of some customers this year. At the same time, the company and senior technical experts and supply chain experts in the RF industry jointly set up maijierui core, which is expected to achieve a breakthrough in BAW filter products in the future. With advanced production technology and excellent product performance, benefiting from the wave of localization of RF chips, the company is expected to stand out in China’s filter blue ocean market.
Profit forecast and investment suggestions
We predict that the company’s earnings per share for 22-24 years will be 0.43/0.62/0.79 yuan respectively (the original forecast for 22-23 years is 0.49/0.70 yuan respectively, mainly increasing equity incentive expenses and slightly reducing the forecast of income and gross profit margin). According to the 22-year PE valuation level of comparable companies, the corresponding target price is 11.18 yuan, maintaining the buy rating.
Risk tips
The risk that the production expansion progress is less than expected, the risk of gross profit margin fluctuation and the risk of asset impairment.
