\u3000\u30 Zhongyan Technology Co.Ltd(003001) 36 Shenzhen Sunway Communication Co.Ltd(300136) )
Event:
The company released the annual report of 2021 and the report of the first quarter of 2022. In 2021, the company achieved a revenue of 7.581 billion yuan, an increase of 18.58% at the same time; The net profit attributable to the parent company was 505 million yuan, a year-on-year decrease of 48.06%. In 2022q1, the company achieved a revenue of 1.914 billion yuan, an increase of 18.66% at the same time; The net profit attributable to the parent company was 121 million yuan, an increase of 5.04% at the same time.
Comments:
In the past 21 years, the scale of revenue has expanded steadily, and the profitability has been under phased pressure under the severe situation. In the past 21 years, the company expanded its new business and extended to high-end products, realizing a revenue of 7.581 billion yuan, an increase of 18.58% at the same time. Under multiple factors, the profitability was constrained. The gross profit margin in 21 years decreased by 11pct to 19.17% and the net profit attributable to the parent decreased by 48.06% to 505 million yuan: 1) the global supply chain was tight caused by covid-19 pneumonia, and the demand for some end products of customers was weakened; 2) The price of raw materials rose rapidly, and the cost side of the company was also affected to a certain extent; 3) The company actively reduced the price of some mature products with fierce competition and low added value, resulting in a decrease in Q4 gross profit margin of 12.87pct to 12.88%.
22q1 revenue and net profit achieved positive growth under adverse circumstances, mature businesses developed steadily, and new businesses continued to increase in volume. 22q1, under the impact of severe situations such as epidemic and geopolitics outside China on the business, the company still achieved positive growth in revenue and net profit, with revenue of 1.914 billion yuan, an increase of 18.66% at the same time; The net profit attributable to the parent company was 121 million yuan, an increase of 5.04% at the same time. 22q1 company's mature businesses such as antenna, wireless charging and EMI / EMC grew steadily. New businesses such as high-precision connectors, resistors and automotive interconnection products continued to increase in volume, and the gross profit margin of new products also gradually increased.
Continuous investment in R & D, fine management and stable cost control. The R & D expenses in year 21 and 22q1 were RMB 628 million / 153 million respectively, with an increase of 7.11% / 20.35% respectively. As of December 31, 2021, the company has applied for 2060 patents; In 2021, 477 new patents were applied for, including 148 5g antenna patents, 16 LCP patents, 18 passive component patents, 11 UWB patents, 79 WPC patents and 16 BTB connector patents. The number of R & D personnel increased by 18.09% to 2702, and the proportion increased by 1.44pct to 23.24%. In addition, the rates of 2021 / 22q1 were 3.98% / 4.07% respectively, a decrease of 2.33pct/0.79pct compared with 20 years and 21q1. The decrease of 35.04% in administrative expenses in the 21st year was mainly due to the reversal of accrued equity incentive expenses due to the company's optimization of management process and the failure to achieve equity incentive.
The scale of emerging businesses has expanded rapidly to create new growth points in the future. In 2021, the company increased the R & D investment and market expansion of new businesses (LCP, high-precision connectors, UWB, passive components, automotive interconnection products, etc.), and the scale of new business revenue expanded rapidly. In 2021, the scale of revenue was about 1.2 billion yuan, which accounted for an increasing proportion of total revenue, and the gross profit margin was gradually increasing.
1. The high-precision connector business relies on advantageous technology to seize the high-end segment market and achieve rapid scale and large volume. In terms of BTB connector, the company's ultra-small spacing BTB connector technology is leading, breaking the monopoly of overseas manufacturers and realizing mass supply to well-known technology manufacturers outside China. It has cooperated with large customer projects in North America and is expected to make further breakthroughs in the future.
2. In terms of LCP and module business, the company continues to strengthen the vertical integration ability and cut into the supply chain of international key customers. The company continues to strengthen the one-stop ability of "LCP material - LCP antenna - LCP module". In 2021, the company's LCP high frequency FCCL successfully passed the UL certification in the United States, which will help the company's LCP products to explore the market.
3. In terms of passive component business, the company aims at high-end positioning, builds an international R & D system, and focuses on promoting the localization of high-end components. In 2021, the company accelerated the expansion of resistance products. In the field of MLCC, the wholly-owned subsidiary Shenzhen Sunway Communication Co.Ltd(300136) (Yiyang) Co., Ltd. signed a cooperation agreement in August 2021. Xinwei Electronic Technology (Yiyang) Co., Ltd. has a registered capital of 2 billion yuan to promote the implementation of MLCC project and build a high-end MLCC product base.
4. In terms of automobile interconnection business, the company is stepping up the development of automobile customers and their business, has obtained the supply qualification of Volkswagen, Dongfeng Honda, GAC Honda, FAW Hongqi, FAW Pentium, Mercedes Benz and other automobile manufacturers, is conducting research and development of relevant products, and has conducted business and project contacts with more than a dozen automobile manufacturers such as Tesla, Huawei, Xiaomi, Toyota, Nissan and Chang'an, Lay a foundation for the rapid development of the company's automobile interconnection business in the next 2-3 years. In 2021, the company won the honor of excellent supplier of Dongfeng Honda and GAC Honda.
Profit forecast, valuation and rating: considering the weakness of the smart machine industry, we adjusted the net profit forecast of Shenzhen Sunway Communication Co.Ltd(300136) 2022-2023 to 850 million (the performance adjustment ratio is - 26.85%, the same as below), 1.031 billion (- 29.90%), and added 1.25 billion net profit forecast in 2024, corresponding to 16x / 13X / 11x for 22-24pe respectively. In view of the steady growth of the company's mature businesses such as antenna, wireless charging and EMI / EMC, new businesses such as LCP, BTB, UWB, passive components and automotive interconnection have begun to increase gradually and maintain the "buy" rating.
Risk tip: mobile phone shipment is less than expected; The expansion of new business and new products does not meet expectations, resulting in macroeconomic risks.
