\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 38 Fibocom Wireless Inc(300638) )
Event: on April 28, 2022, the company released the first quarterly report of 2022. In the first quarter of 2022, the company achieved an operating revenue of 1.178 billion yuan, a year-on-year increase of 36.98%; The net profit attributable to the parent company was 105 million yuan, a year-on-year increase of 30.18%.
Rapid performance growth: the company has been deeply engaged in the Internet of things industry. With the enrichment of product lines and the increase of market expansion, the overall performance has achieved rapid growth. In the first quarter of 2022, the company achieved an operating revenue of 1.178 billion yuan, a year-on-year increase of 36.98%; The net profit attributable to the parent company was 105 million yuan, a year-on-year increase of 30.18%. In February 2022, CAT1 module of the company successfully won the public bidding of CAT1 module of China United Network Communications Limited(600050) digital Internet of things division with the largest share. We expect that the company's performance will continue to grow rapidly in the future.
The gross profit margin and net profit margin improved month on month, and the ability of cost control was enhanced: affected by factors such as rising raw material prices and repeated epidemics, the company's gross profit margin decreased by 3.11pct to 22.00% year on year, but improved by 0.73pct month on month compared with Q4 in 2021. We expect that with the stabilization of raw material prices and the continuous promotion of the company's new products, the company's gross profit margin is expected to rise further. Thanks to the good cost control ability, the company's sales expense rate decreased by 0.63pct to 3.08% year-on-year, and the financial expense rate decreased by 0.46pct to 0.28% year-on-year. Expense control hedged some adverse factors of the decline in gross profit margin. The company's net profit margin decreased by 0.46pct year-on-year and increased by 2.66pct to 8.88% month on month.
5g module continues to achieve breakthroughs: since 2022, the company's 5g module has continuously achieved breakthroughs in certification and production. In January 2022, the company realized full mass production of cost-effective 5g modules fm650-cn and fg650-cn, accelerated 5g UWB applications, and brought better user service experience for 5g cloud games, live video broadcasting, HD video broadcasting and other applications. In February, the company's 5gsub6ghz module fm160-eau became the world's first R16 module fully certified by Anatel. In March, the company launched a new generation of 3gppr16 industrial 5g module fg160 engineering sample and 5g intelligent module sc171 series. In April, the company achieved a technological breakthrough in fwaopen CPU solution based on 5gr16 module, providing more reliable value-added solutions for terminal operation. In the same month, the company has completed the measurement and joint commissioning of 5gcpe scheme based on Qualcomm ipq5018 processor + Xiaolong X62. The scheme has achieved large-scale mass production overseas, helped customers land terminal equipment and improved customers' overall deployment ability.
Investment suggestion: the company is the world's leading provider of wireless communication solutions and wireless modules for the Internet of things. We estimate that the company's operating revenue from 2022 to 2024 will be 5.738 billion yuan (+ 39.6%), 8.260 billion yuan (+ 44.0%) and 11.563 billion yuan (+ 40.0%) respectively; The net profit attributable to the parent company is expected to be 567 million yuan (+ 41.3%), 762 million yuan (+ 34.3%) and 1061 million yuan (+ 39.4%) respectively, corresponding to EPS of 1.37/1.84/2.56 yuan respectively. We give the company 30 times PE in 2022, corresponding to the target price of 41.10 yuan, maintaining the "Buy-A" investment rating.
Risk tips: increased market competition, loss of core technical personnel and disclosure of core technology, exchange rate fluctuations, outsourcing risks
