Master the core technology of optics and optoelectronics, and continuously increase investment in R&D. The company is a high-tech enterprise specializing in R&D, production and sales of all kinds of precision optical components and optical fiber devices. Optoelectronic components are the most advanced optoelectronic sensing components of information systems. The company's products are mainly used in optical communication, fiber lasers and other fields. The technical indicators have all reached the advanced level of the industry. They have been rated as high-tech enterprises, leading enterprises of science and technology giants in Fujian Province, and “specialized, special and new” small and medium-sized enterprises in Fujian Province. 2021Q3 achieved revenue of 85 million yuan, an increase of 8.59% over the previous year, and R&D expenditure accounted for 8.72% of revenue. It achieved total revenue of 219 million yuan in the third quarter, an increase of 8.62% over the previous year. R&D expenditure accumulated 20 million yuan, accounting for 9.16% of revenue, and Guimu's net profit of 39 million yuan, a year-on-year decrease of -30.57%. This was due to plant relocation and production expansion plans, a sharp increase in the number of company personnel and successive equipment investment. The increase in costs and expenses was greater than the increase in revenue.
The development prospects of the optical communication industry are broad, and the upstream market has fully benefited. The company's main products include optical fiber devices, which are located in the upper reaches of the optical communication industry. According to the company's 2021 semi-annual report quoting Cisco, the number of hyperscale data centers in the world will increase to 628 in 2021, and the 5-year compound growth rate will reach 13%. The commercial and large-scale deployment of 5G technology and data center construction have driven the growth of the market capacity of the optical communication industry. According to statistics from LightCounting in the company's '21 semi-annual report, the global optical module market in 2018 was about 6 billion US dollars, the optical module market for telecommunication network applications was 2.9 billion US dollars, the optical module market for data centers and Ethernet applications reached 3 billion US dollars, and the compound growth rate will reach 19% in the next 5 years. The commercial and large-scale deployment of 5G technology has promoted the expansion and upgrading of the optical communication industry market and the upgrading of optical transceiver modules to higher transmission rates, and has also expanded the demand for upstream optical components and optical fiber devices. Large-scale data centers have put forward new and higher requirements for indicators such as the speed and bandwidth of optical components and optical fiber devices, further driving the expansion of the market value space for optoelectronic components.
The application field continues to expand, which is expected to drive the company's performance to continue to grow. The company is closely following the market. Products in the lidar field are currently in the stage of continuous sample delivery and small-batch verification. The company has passed the IATF 16949:2016 automotive industry quality management system certification, and will continue to connect with major customers and car manufacturers in the future. In the AR field, the company has certain technical reserves for optical waveguide technology solutions that are currently relatively promising in the industry. Currently, it is developing optical waveguide lenses and developing further technical cooperation with customers on the optical waveguide part.
Profit forecasts. We expect the company's revenue for 2021-2023 to be 304 million yuan, 415 million yuan, and 569 million yuan respectively, net profit attributable to shareholders of the parent company is 61 million yuan, 106 million yuan, and 151 million yuan respectively, and EPS is 0.47 yuan, 0.82 yuan, and 1.17 yuan. Referring to the company's historical valuation and the overall valuation level of comparable companies, the company was given a dynamic PE range of 40-45X in 2022, corresponding to a reasonable value range of 32.80-36.90 yuan, a “superior to the market” rating.
Risk warning: risk of differentiated competition; risk of declining gross margin.