\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Announcement summary: the company released the first quarterly report of 2022, during which the operating revenue was 3.058 billion yuan, a year-on-year increase of 64.74%; The net profit attributable to the shareholders of the listed company was 124 million yuan, a year-on-year increase of 104.25%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 106 million yuan, with a year-on-year increase of 111.35%.
The net profit in a single quarter reached a new high and the profitability improved significantly. In the first quarter, the company continued the growth trend of 21 years, and its revenue significantly exceeded the level of the same period in previous years. It mainly benefited from the high prosperity of the Internet of things, the growth of the shipment of the company’s LTE, lpwa, vehicle and 5g modules, and the optimization of product structure promoted the overall value. As the main production capacity of the supply side is located in Hefei and Changzhou and cooperates with many OEM factories at home and abroad, the impact of the epidemic is low and the shipment is stable. In terms of profitability, the company’s Q1 gross profit margin was 18.19%, increased by 2.44 PCT and 0.63 PCT month on month in 21q4 and compared with 21 years. Rolling stock, price transmission and other measures to reduce the impact of raw material price rise achieved certain results, with a net profit margin of 4.05%, a slight increase of 0.79 PCT year on year and 0.84 PCT month on month, and the scale effect gradually appeared. The company’s expense control ability is good, and its internal management efficiency continues to improve. During Q1, the expense rate was 14.65%, with a year-on-year decrease of 1.62pct, of which the sales / management / R & D / financial expense rates were 3.56% / 1.97% / 9.02% / 0.11% respectively, with a year-on-year change of 0.63 / – 0.44 / – 1.73 / – 0.08pct. On the asset side, the inventory in the first quarter was 2.957 billion yuan, with a year-on-year increase of 65.94%. The company responded to the rising cost and increased demand by increasing stock. Q1 net operating cash flow was -156815 million yuan, the ratio of net outflow to Datong was narrowed, and the control of customer collection was strengthened. The prosperity of the Internet of things continues to be superimposed on individual factors such as its own scale effect and the optimization of product and regional distribution structure. The annual growth trend of the company is determined, and the profitability is expected to continue to improve. The company released the 2022 stock option incentive plan in March, binding the core personnel to mobilize the enthusiasm of employees and improve the cohesion of the core team. The nuclear goal of the college entrance examination shows the company’s confidence in long-term development.
CAT1 and 5g modules are in large quantity, and the leading position is stable. Under the trend that emerging markets such as CPE, vehicle v2x and XR glasses drive 5g high-speed demand and global 2G / 3G network withdrawal to accelerate the replacement process of 4gcat1, global cat in 2021 1. With rapid growth, the shipment volume reached 120 million pieces. According to the counter point data, 5g products in the 21q4 global module market increased significantly by 324% year-on-year. The company earlier entered the CAT1 and 5g fields and continuously improved the layout. The products cover multiple platforms such as Qualcomm, Ziguang zhanrui and MediaTek. It has supported more than 1000 industry customers to develop and commercialize 5g terminals based on the company’s products around the world. The company sold 175 million modules in 21 years, with a year-on-year increase of 54.32%. According to abiresearch data, the company’s shipping market share among M2M cellular module suppliers reached 38% in 2021, with an obvious leading position. The company expanded its advantages by strengthening R & D and production expansion. In the first quarter, the R & D investment was 276 million yuan, with a year-on-year increase of 38.17%. In 21 years, Guilin R & D center was added to improve the local service capacity of customers in South China. Six R & D centers covered major markets at home and abroad. By the end of 21, the R & D team had a total of nearly 3000, accounting for 72.97% of employees. In terms of production capacity, on the one hand, the company upgraded some automatic production and testing lines to improve the efficiency of the production line. At the same time, the company raised funds to increase the annual production capacity of 90 million pieces in Changzhou. By the end of 21, the annual output of the two self owned manufacturing centers, Hefei intelligent manufacturing center, had reached 45 million pieces. Changzhou has completed the erection of 15 module patch production lines, and the other five are expected to be completed in 22 years. The promotion of production expansion and the transformation of early R & D into output will further expand the company’s scale advantage, Increase market share.
The vehicle business accelerated and the extension of the industrial chain achieved initial results. Since 2015, the company has laid out the field of vehicle mounted products, including LTE / 5G, c-v2x, Android smart, Wi Fi and other communication modules, GNSS positioning modules and antenna products, which can meet the connection needs of different vehicle network application scenarios and the continuity of the host factory’s future product planning. Android smart series modules have been widely used in the field of vehicle mounted central control entertainment system, ADAS / DMS, tachograph, streaming media rearview mirror, 360 look around and so on. GNSS positioning module realizes large-scale landing in the fields of automatic driving, tracker, intelligent lawn mower, two wheel shared bicycle, UAV and so on. The vehicle specification level dual frequency high-precision positioning module lg69t supports RTK and Dr technology, and can receive multiple GNSS satellite signals at the same time and achieve centimeter level positioning accuracy in a few seconds. The vehicle specification level module ag525r-gl adopts a combined positioning solution, which has passed the certification of operators in many regions around the world and entered the stage of mass production. At present, the company has formed cooperation with more than 35 well-known OEMs and more than 60 Tier1 manufacturers in the world, and the fixed-point projects continue to increase. Most of the Shanxi Guoxin Energy Corporation Limited(600617) vehicles have adopted the company’s module products, and the first mover advantage has been established. By the end of the 21st century, the company has launched more than 300 kinds of antenna products around the module layout, achieved rapid sales breakthroughs, and established long-term cooperation with high-end customers at home and abroad. The Internet of things cloud platform has built multiple product lines such as smart travel, smart power and smart factory. ODM business helps the company provide one-stop scheme design services, and the digital integration business of smart city cooperates with provincial / municipal governments Enterprises and institutions and other customers are connected and widely used in corresponding fields. The new business layout will enhance the company’s overall solution capability and enhance its comprehensive competitiveness.
Investment suggestion: Quectel Wireless Solutions Co.Ltd(603236) is the global leader in cellular Internet of things modules, with the overall market share increasing rapidly. The product matrix is expanded from cellular modules to WiFi & BT modules, antennas and cloud platform services. With the scale effect of capacity expansion, the scale of revenue maintained rapid growth. Considering the obvious improvement of profitability in the first quarter, the company raised its profit forecast. It is expected that the net profit from 2022 to 2024 will be 602 million yuan / 855 million yuan / 1235 million yuan (the original forecast value was 547 million yuan / 808 million yuan / 1231 million yuan), and the corresponding EPS will be 4.14 yuan / 5.88 yuan / 8.49 yuan, maintaining the “buy” rating.
Risk warning: industry competition intensifies the risk; The development of Internet of things is less than expected risk; Risk of price rise of upstream chip raw materials; The public materials used in the research report may have the risk of information lag or untimely update.
