\u3000\u3000 Meig Smart Technology Co.Ltd(002881) (002881)
Event: on January 22, the company released the performance forecast for 2021. It is expected to achieve a revenue of 1.95-2.05 billion, a year-on-year increase of 73.95-82.87%, and a net profit attributable to the parent company of 110-125 million, a year-on-year increase of 300.9-355.5%. The company’s business broke out in 2021, with rapid growth and full momentum.
Market recognition continued to improve, seize industrial opportunities and achieve sustained high growth. The market recognition of the company’s wireless communication module + solution business model continues to improve, and the scale of high-quality customer groups represented by global operators, brand customers and listed companies continues to expand. The company continued to deepen the customized development of 4G / 5G intelligent modules. 5g intelligent modules delivered in large quantities in the field of intelligent cockpit of new energy vehicles. The shipment of 4G / 5G data transmission modules increased rapidly compared with the same period last year. Breakthroughs were made in the field of smart grid, and the layout of cloud computing, laptop, HD video and other fields continued to deepen. The company seized the market opportunity, gave full play to the accumulated advantages of R & D, and the shipment volume of products in the field of FWA (fixed wireless access) increased significantly.
Focusing on intelligence and high-end, the market position continues to improve. In the field of vehicle network, the company has extensive cooperation with afterloading partners and 5g intelligent module cooperation with head car factory, which is expected to become the key point of the company’s future performance growth. In the FWA field, the company has more than 6 years of Huawei FWA equipment solution development capability. 5g and wi-fi6 chip modules have been launched, and FWA products have been supplied to operators in North America. In the field of Pan Internet of things terminals, the company takes intelligent modules and 5g modules as the breakthrough, deeply layout various unmanned scenes and schemes, and seize the market opportunity. The company’s products focus on high-end fields such as intelligent modules and 5g Internet of vehicles, and the card position is clear. We expect the company to seize the industry opportunities and achieve high-speed growth in the next three years.
The scale effect is emerging, and the positioning of high-end profitability is expected to continue to rise. The scale effect of the module industry is obvious. Leading manufacturers with large shipments often have higher profit levels. As a new force in the module industry, the company has achieved rapid growth this year. With the continuous expansion of the company’s revenue scale and the continuous delivery of high-end high margin products, the company’s gross profit margin began to rise in the third quarter. We expect that the subsequent demand for cellular modules will continue to be high, and module manufacturers may continue to raise prices. With the continuous volume of 5g and other high-end products, the company’s gross profit margin is expected to continue to increase.
Investment suggestion: as a small market value and high growth Internet of things company, with the continuous realization of high growth performance, the company is expected to run out of alpha in the rapidly developing Internet of things sector. We expect that the company’s revenue from 2021 to 2023 will be RMB 2.06/36.1/5.2 billion respectively, the net profit will be RMB 124 / 220 / 367 million, the corresponding EPS will be RMB 0.67/1.19/1.99, and the corresponding PE will be 56.9/31.9/19.1 times. Considering the rapid growth of the company and the improvement of its industry status in the future, we will maintain the “buy” rating.
Risk warning: the development of Internet of vehicles is not as expected; 5g development is less than expected.
