\u3000\u3000 Eoptolink Technology Inc.Ltd(300502) (300502)
Event: the company issued a performance forecast. In 2021, the net profit attributable to shareholders of listed companies was 640-680 million yuan, with a year-on-year increase of 30.15% - 38.28%; Deduct non net profit of RMB 578 million to RMB 618 million, with a year-on-year increase of 26.01% - 34.73%.
Our comments are as follows:
The performance is slightly better than the market expectation and is expected to continue to grow rapidly
The company benefited from the continuous growth of data center market demand outside China and the continuous and stable cooperation with customers in the telecom market, and the company's performance was slightly better than the market expectation. According to the forecast, the net profit attributable to the parent company in Q4 was 175-215 million yuan, with a median of 195 million yuan, a year-on-year increase of 30.16%, still maintaining a strong growth momentum. It is expected that the company is expected to maintain a rapid growth trend in the future with the breakthrough of new major customers in the digital communication market and the continued prosperity of the industry (200g & 400g).
The demand of data center is growing, and the prospect of 400g optical module is promising
In recent years, with the increase of the number and density of ports, the cost proportion of optical modules in the data center network is also gradually increasing. In the future, with the increasing demand and construction of data center, data center will gradually become one of the main application fields of optical module. Global Internet giants and data center operators are continuously promoting the upgrading of data center broadband to 400g. According to omdia's prediction, from 2019 to 2023, the capital expenditure of global data centers will rise from US $82 billion to US $125 billion, with a compound annual growth rate of 9.8%. The company has achieved batch shipment of 400g optical modules in 2020. In the future, the company will further strengthen the R & D and production capacity of relevant high-speed optical modules in the application field of data center, continue to promote market development and further enhance the competitiveness of the company's products in the application field of data center.
Master high-quality customer resources and continuously layout the optical module market
The market introduction and share of the company's key customers continued to break through. The company has actively established good cooperative relations with global mainstream equipment manufacturers and Internet manufacturers. A variety of products have passed customer certification and achieved batch shipment, and the product and customer structure have been further optimized. Driven by the continuous acceleration of 5g and data center construction, the company's related products are expected to continue to grow in large quantities in the future.
The products are highly competitive, and the upgrading of 400g digital communication is expected to open up space for sustainable growth in the future
The company is one of the few enterprises in China that can deliver 100g optical modules and 400g optical modules of digital communication in bulk, and master high-speed optical device chip packaging and optical device packaging. It has successfully launched 400g optical module products based on silicon optical solutions and 800g optical module product portfolio based on EML and siph solutions, It is expected to fully enjoy the bonus of 5g construction + 400g upgrade of digital communication in the future.
Acquire Alpine to further enhance the company's comprehensive competitiveness
On August 26, 2021, the company issued the announcement on the acquisition of equity of overseas joint-stock companies, and planned to acquire the remaining shares of Alpine optoelectronics, Inc., an overseas joint-stock company with its own funds. 1) The target company has an independently developed ncp4tm silicon photonic technology platform, which provides single wavelength 100g optical solutions, DWDM, CWDM and lan-wdm connection solutions, which can be applied to the interconnection of high-speed 40km DCI (layer 2 network expansion) and high-density data centers, which will enhance the company's coherent optical modules and silicon optical capabilities; 2) The target company has a number of senior experts in the optical module industry in California, USA, which is expected to enhance the company's R & D strength; 3) Improve the company's global market service capability: the target company is located in the United States. After integration, it can respond to customer needs more quickly and provide high-quality and localized sales service and technical support for global customers.
Profit forecast and investment suggestions: under the dual driving background of 5g large-scale construction + data center to 400g iterative demand, the company's customer and product structure are continuously optimized, its competitiveness is also continuously improved, and the rapid growth trend is expected to continue. It is estimated that the net profit of the company from 21 to 23 years is 650 million yuan, 820 million yuan and 1 billion yuan, corresponding to 23x PE in 22 years, maintaining the "buy" rating.
Risk warning: the impact of the epidemic on overseas business; Price reduction of products caused by fierce competition; Risks such as lower than expected upgrade progress of data communication 400g; The performance forecast is the preliminary calculation of the company, and the actual situation is subject to the annual report
