\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 08 Zhongji Innolight Co.Ltd(300308) )
Event: on April 24, Zhongji Innolight Co.Ltd(300308) released the annual report of 2021 and the Q1 report of 2022. The revenue in 2021 was 7.695 billion yuan, a year-on-year increase of 9.16%, and the net profit attributable to the parent company was 877 million yuan, a year-on-year increase of 1.33%; In 2022, Q1 revenue was 2.089 billion yuan, a year-on-year increase of 41.91%, and the net profit attributable to the parent company was 217 million yuan, a year-on-year increase of 63.38%. The annual performance is in line with our expectations.
Strong demand in overseas digital communication market and rapid growth in Q1 performance in 22 years: from the perspective of market demand, in 2021, the company’s main shipping products maintained the continuous growth of shipments in overseas markets, benefiting from the opportunity of key customers of cloud manufacturers in North America to increase capital expenditure and batch deploy 400g and 200g From the perspective of China Telecom Corporation Limited(601728) market, the demand did not increase significantly compared with last year, and the company’s 5g product revenue decreased compared with 2020; Therefore, in terms of demand, the data communication market continues to be strong, driving the demand for optical module to continue to rise. However, due to the fact that it takes some time for customers to import new products such as 400g and gradually release their own capacity, the performance in 2021 shows a trend of low before high, and continues to increase steadily quarter by quarter. Q1 in 2021 continues a good growth trend, with a significant increase of 41.91% compared with Q1 in 2021, and the net profit attributable to the parent company increased by 63.38% year-on-year.
The prosperity of the high-speed optical module industry continues to improve. As a leader in the optical module field, the company continues to strengthen its leading advantage: with its leading R & D ability, low-cost product manufacturing ability and comprehensive delivery ability, the company ranks among the top in terms of shipment volume and market share in the industry. In the ranking of optical module manufacturers in 2021, Zhongji Innolight Co.Ltd(300308) ranked second in the world. According to the latest report of omdia, the company’s market share in 2021 ranked second in the world, about 10%, of which Q4 accounted for as much as 12%, with the highest share increased. At the technical product end, we will continue to improve the sales volume and market share of the current advantageous products 200g and 400g, continue to explore new profit growth points, and complete the sample delivery, testing and certification of 800g series optical modules to customers in 2021; The Fab yield of 400g silicon optical chip has been continuously improved, and the development of 800g silicon optical chip has been completed at the same time. In terms of coherence, products such as 400gzr and 200gzr for data center interconnection or telecom man scenarios have been produced and shipped in small quantities. Xuchuang industrial research institute conducts pre research on Key Technologies of CPO and continues to build an advanced photonic chip industrialization technology platform and a 2.5D and 3D hybrid packaging platform. According to Dell’Oro statistics, the capital expenditure of global data centers is expected to reach $350 billion in 2026. We believe that the capital expenditure of cloud manufacturers is expected to bring steady growth in the revenue of optical module manufacturers. As a leader in the field of optical modules, the company continues to be optimistic about the steady growth of future performance.
Profit forecast and investment rating: according to the latest financial report data and operating conditions, we raised Zhongji Innolight Co.Ltd(300308) profit expectation. The net profit attributable to parent company in 20222023 was raised from 1.047/1.224 billion yuan to 1.055/1.306 billion yuan. The net profit attributable to parent company in 2024 is expected to be 1.655 billion yuan. The EPS in 20222024 is expected to be 1.32/1.63/2.07 yuan respectively, and the corresponding PE valuation is 22.01/17.78/14.03 respectively. Zhongji Innolight Co.Ltd(300308) still maintains a leading position in the optical module market, We continue to be optimistic about future performance development, so we maintain the “buy” rating.
Risk warning: the demand of optical module does not meet the expected risk; The cost pressure of upstream raw materials has increased.
