Guangxun Technology (002281): Non-recurring factors cause short-term fluctuations of 5G + Datacom long-term logic unchanged
The event company released 都市夜网 the 2018 annual report and the 2019 first quarter report. In 2018, the company realized operating income49.
29 ppm, an increase of ten years8.
26%, net profit attributable to mother 3.
33 ppm, with a ten-year average of zero.
47%, and the company plans to generate a cash dividend of 1 for every 10 shares.
The company achieved operating income in the first quarter of 201912.
1.9 billion, an annual increase of 0.
99%, net profit to mother 6392.
950,000 yuan, a ten-year average of 17.
80%, net profit after deduction after returning to mother increased by 12.
Our comments are as follows: The key business segments have developed smoothly and become 5G core suppliers for key equipment supplier customers. At the same time, the data center market has received large orders from key customers, driving the company’s revenue to grow steadily.
Under the adverse effects of the ZTE incident in 2018, the company’s domestic revenue in the first half of the year changed at least 16 each time.
However, through the ZTE incident settlement, the operator’s order was restored, and the impact on the company’s business was basically eliminated.
The reporting company has become a key global telecommunications equipment supplier “Global Gold Supplier” and 5G core supplier, with outstanding technical strength, delivery capabilities and brand image, and has long-term development potential.
In the data center market, the company has continued to make important breakthroughs. In 2018, data center optical modules received large-volume orders from key customers, DCI entered the large-scale mainstream supplier supply list, and the overall revenue of overseas markets increased by 53%, a record high.
The company’s main business segments developed smoothly and revenue grew steadily.
Industry competition has intensified, high-end product iterations have not yet arrived, and gross profit margins are under pressure.
In terms of business, the company’s gross profit margin for transmission business was 26.
70%, increase by 0 every year.
94 levels, gross margin of data and access services8.
67%, a decline of 3 per year.
The transmission business mainly includes high-end telecommunications high-end devices, the industry has higher barriers to entry, and its gross profit margin is basically stable.
The data and receiving services include optical module / device products such as base stations, home broadband, and data centers. The segments are directly connected, and the peak demand for new products such as 5G, 400G datacom, and 10GPON has not yet arrived. The product structure has not yet begun. The price of old products has not yet started.The pressure is under pressure, which puts a certain pressure on the overall gross profit margin.
With the construction of 5G in 19-20, the upgrade of 10GPON, the 400G demand for data centers, etc., and the company’s overall gross margin has gradually improved.
Short-term sales, R & D investment continue to increase, and non-recurring factors such as the distribution of incentive costs and government subsidies have a certain impact on the company’s performance.
With the sales volume of new products and amortization of fair incentive costs, the company’s overall profitability has gradually strengthened.
The company’s sales expense ratio in 2018 was 2.
77%, a year up 0.
26 units; management and R & D expense ratio 10.
26%, a year up 0.
At present, the company is still in an important stage of market promotion and new product research and development, and equity incentive expenses will also affect more than 60 million yuan in 18-19 year performance.
At the same time, in the first quarter of 2019, the company’s government subsidies decreased by about 20 million yuan. If the government subsidies were not considered, the company’s net profit in the first quarter of 2019 would increase by 12%.
Along with the company’s 5G, datacom 400G and other new product sales gradually starting to increase, the expense ratio has gradually increased, and at the same time, non-recurring effects such as fair incentive fees have continued to decrease, and the company’s overall profitability has gradually strengthened. Looking ahead, the company, as a leading manufacturer of the global optical module / device whole industry chain layout, the telecommunications market is heading for the 5G opportunity. The datacom market continues to break through to form a two-wheel drive for overall performance. The high-end chip autonomy promotes the company’s core competitiveness.force.
According to Ovum statistics, the company’s global share in the fourth quarter to the third quarter of 20177.
1%, ranking fourth in the industry.
The company’s products cover telecommunications, datacom and other communication fields. 5G construction is expected to gradually start in 1919. Demand for telecommunication optical modules will bring double improvement in quality and quantity. The rapid development of global cloud computing will affect data centers and supporting digitalcoms.The module generates continuous demand pull.
The company continues to develop in the field of upstream core high-end chips, and strives to achieve autonomous breakthroughs in high-end chips, further strengthening the company’s core competitiveness.
Investment advice and profit forecast: The company’s telecommunications business has grown steadily, and the digital communication business has continued to break through, becoming an important driving force for the company’s performance growth.
The future 5G construction and global cloud computing development are expected to promote the company’s long-term rapid growth in performance.
Due to short-term price competition and non-recurring impacts that exceed expectations, the company’s 19-20 year net profit was lowered from 4.
54 ppm to 4.
400 million, while forecasting a 21-year net profit6.
8 trillion, corresponding to 19 times 50 times price-earnings ratio, maintaining the “overweight” level.
Risk Warning: Lower Expected Downstream Capital Expenditure, Technology R & D Risk, and Price Competition Exceeds Expectations