\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 94 Suzhou Tfc Optical Communication Co.Ltd(300394) )
Event:
The company issued the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 1.032 billion yuan, a year-on-year increase of 18.20%, breaking the 1 billion yuan mark; The net profit attributable to the parent company was 306 million yuan, a year-on-year increase of 9.77%. In the first quarter of 2022, the operating revenue reached 283 million yuan, a year-on-year increase of 16.18%, a record high; The net profit attributable to the parent company was 83 million yuan, with a year-on-year increase of 18.09%, also the best profit performance in the first quarter in history.
Our comments are as follows:
The growth of cloud computing traffic promotes the continuous growth of the demand for optical devices, and key products such as optical engines gradually contribute to the performance increment.
The company's revenue exceeded the 1 billion mark in 21 years, the growth rate of revenue in the single quarter of 21q4 increased significantly, and the good growth trend continued in 22q1. Under the factors such as the epidemic and the Spring Festival, the company still achieved the highest single quarter revenue scale in history. The good growth of revenue mainly comes from: 1) the growth of data traffic and cloud computing demand promotes the continuous growth of capital expenditure of major data center manufacturers in the world, and the superposition of technology upgrading iterations drives the continuous growth of the demand for optical modules and upstream optical devices; 2) Mass production of optical engines and other products with key layout; 3) Arctic optoelectronics, Tianfu precision and other subsidiaries bring incremental revenue and profit contribution. In the 21st year, the company's revenue from passive components was 920 million yuan, with a year-on-year increase of 23.74%; Affected by the weakening demand for 5g, the company's active device revenue was 85 million yuan, a year-on-year decrease of 27.06%.
The conversion of Jiangxi Industrial Park to fixed assets has a certain impact on the short-term gross profit margin, and the high-intensity R & D investment lays the driving force for future growth.
From the perspective of gross profit rate and expense rate, the gross profit rate of optical communication components in 21 years was 49.16%, down 3.61 percentage points year-on-year, of which the gross profit rate of passive components was 51.16%, down 6.24 percentage points year-on-year; 22q1's overall gross profit margin was 49.69%, a year-on-year decrease of 4.35 percentage points and a month on month increase of 2.48 percentage points. In the 21st year, the overall expense rate of the company was 17.25%, with a year-on-year increase of 0.35 percentage points; 22q1 expense rate was 16.37%, down 1.03 percentage points year-on-year. The changes of gross profit rate and expense rate are mainly due to 1) the increase of labor and manufacturing costs caused by the depreciation of consolidated subsidiaries and Jiangxi Industrial Park. However, with the continuous increase of the company's revenue, the gross profit rate is expected to continue to improve month on month; 2) The company's key products such as optical engine maintain high and light R & D investment, but with the continuous volume of main products and the continuous embodiment of scale effect, the overall cost rate is expected to continue to be diluted.
The company has developed into a leading platform optical device solution company, with perfect production base layout in China and Southeast Asia, outstanding globalization and localization service ability, and has become the preferred supplier for many mainstream optical communication customers.
The company has accumulated the world's leading process technology in the fields of precision ceramics, engineering plastics, composite metals, optical glass and other basic materials, and the product platform has been continuously expanded. At present, the company has the mass production capacity of basically complete devices in the upstream of optical modules, and can provide customers with one-stop solutions. Meanwhile, the mass production and shipment of key products such as high-speed optical engine is expected to further improve the product value and the overall market space in the future. The company has also extended its capabilities beyond the optical communication industry. It has sent product samples to many customers in the field of lidar and medical testing. At present, it has achieved small batch delivery for some customers, which is expected to create a new growth pole. The company's Jiangxi production base is expected to gradually reduce production costs, and the production base in Southeast Asia will gradually promote and strengthen global market competitiveness.
Profit forecast and investment suggestions:
With the continuous promotion of 5g construction of operators, the telecom industry chain is expected to recover significantly, and the company's demand for telecom products is expected to improve. Capex, an overseas cloud giant in the digital communication market, continues to grow, with traffic growth and rapid iteration of new technologies. The demand for digital communication is expected to maintain sustained and rapid growth. With the continuous expansion of the company's product line, mass production of key products of optical engine, lidar and medical detection, the market is expected to break through, and the growth momentum is full in the future. As the depreciation of the production base and the cost investment are higher than expected, the net profit attributable to the parent company in 22-23 years is adjusted from 440 million and 580 million yuan to 410 million and 540 million yuan respectively, and the net profit attributable to the parent company in 24 years is expected to be 710 million yuan, corresponding to 20 and 15 times the P / E ratio in 22-23 years. The "overweight" rating is reiterated.
Risk tip: the downstream demand is lower than expected, the progress of new products is slower than expected, and the impact of the epidemic is higher than expected
