\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 94 Suzhou Tfc Optical Communication Co.Ltd(300394) )
Event overview: on April 26, 2022, the company released the first quarterly report of 2022. 22q1 achieved an operating revenue of 283 million yuan, a year-on-year increase of 16.18%, a month on month increase of 6.11%, and a net profit attributable to the parent company of 83 million yuan, a year-on-year increase of 18.09% and a month on month decrease of 11.25%.
The performance in the first quarter maintained steady growth, which was in line with expectations as a whole: at the revenue level, under the background of the complex epidemic situation in the first quarter, the company actively coordinated logistics and production, ensured the stable delivery of orders, and achieved a revenue of 283 million yuan, a year-on-year increase of 16.18%, which was in line with expectations as a whole. In terms of gross profit margin, under the influence of factors such as the rise of raw materials and labor costs in the first quarter, the gross profit margin stopped falling and stabilized, reaching 49.69%, which is basically the same as that in 2021. We believe that with the smooth progress of the conversion to Jiangxi Tianfu, including the further continuous improvement of the yield after the conversion, the company’s gross profit margin is expected to gain momentum. In terms of expense rate, the company’s sales / management / R & D expense rate was 1.44% / 6.04% / 9.52% respectively, with a year-on-year change of + 0.05 / – 2.37 / + 0.55pct. The change of management expense rate is mainly due to the significant reduction of business exchanges affected by the epidemic, while the increase of investment in R & D projects increases the R & D expense rate by 0.55 PCT.
High overseas demand and building the core driving force of performance growth: since 2021, with the continuous high demand in the downstream overseas data communication field and the breakthrough in the development of overseas high-quality customers, the proportion of the company’s overseas revenue has continued to rise, from 36.78% in 2020 to 50.42% in 2021. In order to better meet the growth of overseas demand, the sales level company has formed a global network layout with the United States, Hong Kong, Shenzhen and Wuhan as its sales branches in recent years. In terms of production, it has started to establish overseas production bases in Southeast Asia to make use of the differentiated advantages of different regions in the world to deepen the global production resource layout, so as to meet the personalized needs of customers in different regions in the world for a long time. Looking forward to the whole year of 2022, capex, an overseas cloud computing giant represented by meta, is expected to maintain significant growth, which is expected to further stimulate the overall demand for optical device products in the upstream of the industrial chain. Superimposed on the exchange rate level, the recent continuous rise of the exchange rate of the US dollar against the RMB will be double positive for Tianfu, whose business begins to focus on overseas.
The fund-raising investment project has entered mass production, and various emerging businesses have made steady progress: the company’s fund-raising investment project “construction of high-speed optical engine for 5g and data center” is progressing smoothly. At present, it has been transferred from small batch to mass production, providing a positive contribution to the performance. At the same time, relevant products supporting 400g and 800g optical modules of digital communication in each product line have also realized R & D, sample delivery and mass production in batches. Driven by the high demand in the downstream digital communication field, it is expected to provide an important increment for the company’s performance. In the field of lidar and medical detection outside the field of optical communication, the company’s relevant optical device products have also sent samples and achieved small batch trial production, waiting for large demand and can be expected in the future.
Investment suggestion: we expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 425 / 545 / 682 million respectively, and the corresponding PE multiple is 17x / 13X / 11x. As a scarce one-stop solution provider of platform optical devices in China, the company has strong traditional passive business strength, obvious synergy between active business and passive device business, and prominent platform attribute. With the continuous improvement of the proportion of overseas revenue, the realization of large-scale production of high-speed optical engine project and the acceleration of cross field emerging business, the company has full growth momentum. Maintain a “recommended” rating.
Risk tip: the market demand of traditional telecom / digital communication is less than expected, and the expansion of new application fields is less than expected
