2021-10-29Guosheng Securities Co., Ltd. Song Jiaji, Huang Han, Zhao Piye conducted a study on New Yisheng and released a research report "Q3 Temporarily Under Pressure, Shift Gears and Start Again", this report gives a buy rating to New Yisheng, and the current stock price is 28.38 yuan.
New Yisheng (300502)
Event: On the evening of October 27, the company released three quarterly reports, achieving revenue of 2.02 billion yuan, an increase of 40.5% year-on-year, and net profit of 465 million yuan, an increase of 36% year-on-year. In the third quarter of the single quarter, the revenue was 578 million yuan, down 3.8% year-on-year, and the net profit was 142 million yuan, down 5.8% year-on-year, lower than market expectations.
Revenue and profit continued to grow at a high speed, and the slowdown in the third quarter did not change the long-term trend. The company continued to maintain the continuous growth of revenue and profit in the first three quarters, mainly due to the continuous release of high-end optical transceiver products such as 400G and 100G on the overseas digital communication side, as well as the continuous strengthening of cooperation with customers in the domestic and foreign telecommunications markets. The company's performance slowed down slightly in the third quarter, and we judge that the slowdown in the pick-up progress of some customers has had an impact on the performance of the single third quarter, and from the data point of view, the inventory at the end of the third quarter increased by nearly 270 million yuan compared with the mid-report. The extension of this part of revenue recognition is expected to be reflected in the fourth quarter, with performance delays but not disappearances.
Sufficient raw materials lay a solid foundation for delivery and performance. At the end of the reporting period, the company's inventory has reached a record high of 1.38 billion yuan, the company's inventory has continued to increase since 20Q3, combined with the industrial chain research, we judge that the main reason is that the company has increased the reserve of key raw materials such as chips since the middle of 2020. In the context of "lack of cores" in 2021, chip reserves have become the key to limiting the production capacity of companies. The company's sufficient inventory of raw materials helps it to deliver orders on schedule and steadily release production capacity, reflecting the company's accurate forward-looking judgment of the development of the industry, the supply chain management is in place, and it can better grasp the industry opportunities.
800G and silicon light layout is complete, laying a good foundation for the future. The company acquired the Alpine silicon photonic technology platform, providing single-wavelength 100G optical solutions for data center connectivity, while providing PAM4 products, strengthening the company's layout in the field of silicon light, and the company's 800G series product portfolio has been released to participate in the exhibition, and it is expected that small-scale sample verification will be carried out in the future. The company actively participates in the layout of the industry's cutting-edge technology development route, with the continuous iterative progress of the industry, we believe that the company's core technical experience will continue to strengthen, the market position is expected to continue to improve, for 400G and subsequent development to open up a new space.
Continued recommendation, maintaining a "Buy" rating. Next year, the company's core focus is on new customer expansion and the demand of overseas cloud vendors continues to increase, we expect the company's net profit attributable to the mother in 2021-2023 to be 6.5/8.1/960 million, YoY33%/24%/19%, corresponding to EPS of 1.29/1.60/1.90 yuan, corresponding to the current PE30/24/20X. Referring to the historical valuation of the industry, since the acquisition of Suzhou Xuchuang, the pe (TTM) of The inter-medium Innova has been 35-188X in the past 5 years; the PE (TTM) of Guangxun Technology has been 37-73X. Considering the industry boom and the growth rate of the company's performance, the current valuation is attractive.
Risk Warning: The progress of 5G is not up to expectations, and market competition is intensifying.
A total of 13 institutions have given ratings in the last 90 days, 10 buy ratings and 3 overweight ratings; the average target price of institutions in the past 90 days has been 47.75; the Securities Star Valuation Analysis Tool shows that new Yisheng (300502) good company rating is 3.5 stars, good price rating is 3 stars, and valuation comprehensive rating is 3.5 stars.