\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Event: on April 28, Quectel Wireless Solutions Co.Ltd(603236) released the first quarterly report of 2022. The revenue in 2022q1 was 3.058 billion yuan, up from 1.856 billion yuan + 64.74% in 2021q1; In 2022q1, the net profit attributable to the parent company was 124 million yuan, up from 61 million yuan in 2021q1 + 104.51%, and deducting the net profit not attributable to the parent company was 106 million yuan, up from 111.35%.
The performance of the company increased significantly in 2022q1, and the overall performance was brilliant. 1) Revenue side: the company's revenue increased year-on-year in the first quarter, which we believe is mainly due to the continuous high prosperity of the Internet of things industry and the company's expansion in important downstream application fields such as laptop and vehicle; 2) Cost side: the company's overall gross profit margin in 2021 was 17.6%, including 15.8% in 2021q4 and 18.19% in 2022q1. We believe that it is mainly due to the release of the cost pressure of upstream raw materials caused by the improvement of supply and demand relationship; 3) Profit side: the net profit attributable to the parent company in 2022q1 reached 124 million yuan, up from 61 million yuan + 104.51% in 2021q1, reaching the highest level in a single quarter in the company's history and maintaining rapid growth.
The cellular Internet of things module industry continues to be booming, and the company's market share continues to lead. According to the prediction data of ABI research, the number of global Internet of things connections will reach 8.37 billion in 2021, which is expected to reach 23.1 billion by 2026, and the CAGR will be about 22.5% from 2021 to 2026. At the same time, according to the latest data of counterpoint, the global cellular Internet of things module revenue in 2021q4 is + 58% year-on-year, the Chinese market revenue accounts for more than 40%, and the Quectel Wireless Solutions Co.Ltd(603236) global market share reaches 26.6%, ranking first in the world. At the same time, it is significantly ahead of the industry and has a significant leading position. We believe that the company's product matrix is perfect, and the products in the field of low, medium and high rate are highly competitive. In the future, with the continuous production of self built production lines, the market share is expected to be further improved.
The business field and revenue scale of the company are constantly expanding, and the profitability of the company is expected to be gradually improved. The company continues to enrich product categories and downstream application fields, and continues to expand in many fields, such as intelligent vehicle networking, wireless gateway, smart factory, smart city, photovoltaic, digital economy, smart Siasun Robot&Automation Co.Ltd(300024) , Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) and so on. The product structure is continuously optimized and the volume of revenue is growing rapidly. In the short term, due to the slight disturbance of upstream raw material factors and exchange rate fluctuations on the company's profitability, we believe that the subsequent raw material prices disturbed by external reasons are expected to fall with the improvement of the supply side. At the same time, the impact of exchange rate factors is expected to gradually ease. Superimposed with the cost side advantages brought by the company's scale effect, the overall profit level of the company is expected to usher in a more obvious marginal repair.
Investment suggestion: we believe that with the development of the Internet of things industry and the continuous extension of downstream application fields, the comprehensive income brought by the company's scale effect plus cost advantage will gradually appear, and the company's market share is expected to be further improved. At the same time, the vehicle specification level module products have high technical and certification barriers, and the company has obvious first mover advantages. It is expected to fully benefit from the historical opportunities of vehicle intelligence and networking, and open the space for long-term performance growth. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 548 / 848 / 1279 million respectively, corresponding to PE multiple of 38x / 24x / 16x. We expect that the company's performance under equity incentive is expected to continue to increase and have high growth. Maintain a "recommended" rating.
Risk tip: the competition in the Internet of things industry is intensifying; The development of the Internet of vehicles industry is less than expected; The release of cost side pressure is less than expected.
