Incidents:
The company released its quarterly report for the third quarter of 2021. Revenue for the first three quarters was 801 million yuan, an increase of 43.2% over the previous year; net profit attributable to owners of the parent company was 494.699 million yuan, a decrease of 14.65% over the previous year; basic earnings per share were 0.33 yuan, a decrease of 21.43% over the previous year.
Comment:
Revenue growth preceded profit, and R&D expenditure increased significantly
The company achieved revenue of 279 million yuan in a single quarter in the third quarter, an increase of 21.43% over the previous year; net profit attributable to shareholders of listed companies was 165.262 million yuan, an increase of 107.73% over the previous year. The gross profit margin for a single quarter was 28.92%, up 4.65 pcts year on year, up 3.98 pcts month on month; net profit margin was 5.91%, up 2.45 pcts year on year, down 2.09 pcts month on month. The decline in net interest rates was mainly due to the year-on-year increase in the company's R&D expenses, which increased from 15.52% in the second quarter to 22.21% (9.93 pcts year-on-year increase), mainly the increase in R&D staff remuneration, Greek team expenses, new product development mask consumables, equity incentive expenses, etc.
The consumer electronics market is facing uncertainty. Concerns are that the marginal improvement of the company's products from the low end to the middle and high end is due to factors such as tight shipping capacity and shortage of chip production capacity. Chips for terminal products are out of stock and cannot be shipped, and short-term regional demand has declined. The consumer electronics market as a whole is facing great uncertainty. Taking TWS products as an example, Xuri big data data shows that TWS Bluetooth chip shipments in March-July showed a month-on-month downward trend. On the supply side, the impact of the epidemic directly caused many manufacturers to tighten inventory preparation and production capacity expansion. Shipments from middle and high-end brands were more stable than white brand products. The company continues to upgrade and iterate on various series of products. IoT and TWS chip customers have switched from low-end to mid-range and are concerned about marginal improvements brought about by the company's upgrades.
Profit forecasting
The gross margin of the company's products fell short of expectations due to short-term uncertainty in downstream demand. R&D expenditure increased high, and performance was under pressure in the short term. According to the revised profit forecast, the company's net profit for 21-23 is estimated to be 0.92, 164, and 246 million yuan. It is concerned that performance will continue to pick up month-on-month after iterations of new products, and downgrade the rating to “increase holdings.”
Risk warning
Shipments fell short of expectations and costs rose sharply due to tight wafer foundry; TWS brand customer adoption fell short of expectations; Wi-Fi chip customer demand fell short of expectations; and product prices fell sharply due to the entry of new players.