Events: (1) the company released its 2021 annual report. In 2021, the revenue was 1.241 billion yuan, + 96.64% compared with the same period last year, and the net profit returned to the mother was 245 million yuan, + 533.54% over the same period last year. (2) the company issues the first quarterly report of 2022. 2022Q1 realized revenue of 262 million yuan, + 4.26% year-on-year, and net profit of 73.648 million yuan, + 93.04% year-on-year.

Comments: in 2021, the company's production and sales are booming, the gross profit margin is higher, and the net profit of 2022Q1 is higher than the same period last year. (1) the company's production capacity continues to release, the product structure is further optimized, and the proportion of high value-added products in the main business income increases significantly. (2) the number of customers and penetration are increasing steadily, increasing the platform certification of mainstream solution providers, and actively expanding into automotive electronics and other fields. (3) downstream 5G, automotive electronics and other fields drive the strong demand of the crystal oscillator industry, the middle and high-end domestic substitution accelerates, and the crystal oscillator leader continues to benefit.

1. In 2021, the company's production and sales are booming, the gross profit margin is higher, and the 2022Q1 net profit is higher than the same period last year.

(1) in 2021, the company's revenue and net profit increased, and the gross profit margin increased. In 2021, the company realized revenue of 1.241 billion yuan, + 96.64% compared with the same period last year, and realized net profit of 245 million yuan, + 533.54% over the same period last year.

2022Q1 realized revenue of 262 million yuan, + 4.26% year-on-year, and net profit of 73.648 million yuan, + 93.04% year-on-year. (2) the fund-raising projects will be implemented in an orderly manner, and the production capacity will be released continuously. In 2021, the total output of the company's main products was 3.589 billion, which was + 57.42% compared with the same period last year. Among them, with the gradual recovery of the market of TF series products, the production capacity of SMD series products increased by 35.97% compared with the same period last year, and the output increased by 74.63% over the same period last year. (3) the product price rises, the product structure is optimized, and the gross profit margin increases significantly. In 2021, the company's main business comprehensive gross profit margin of 41.28%, year-on-year + 20.03pct, in which SMD K series, SMD thermal T series products gross profit margin increased significantly.

two。 The products with high value-added advantages increase significantly, and the lithography process promotes the iterative upgrading of the products.

The products with high added value have increased significantly, and the product structure has been further optimized. (1) the company gives full play to the advantages of semiconductor lithography technology with the orderly implementation of the fund-raising project, the production capacity of the superior products of small size, high fundamental frequency, thermal series and TCXO series has been improved, and the product structure has been further optimized. (2) the proportion of high value-added products in the main business income has increased significantly: revenue from SMDK series products is + 393.71% compared with the same period last year. Revenue from SMDM series 2016 and below is + 173.06% + 105.75% compared with the same period last year.

The lithography process is further optimized and upgraded. (1) the company takes MEMS lithography technology as the traction, realizes the completely independent intellectual property rights of the key core equipment, and improves the quality rate and qualified rate of lithography wafers. (2) in 2021, the company strengthened its technological innovation capability, and invested 57.9443 million yuan in R & D, an increase of 109.87% over the same period last year.

The number of customers and penetration have increased steadily, and the customer advantage is significant. (1) the company continues to strengthen the product research and development and platform certification of solution vendors, and has completed a number of mainstream platform certification on the basis of the original platform certification. (2) the company actively develops into automotive electronics, industrial terminals and RTC modules, rapidly embedding into new application fields, seizing the advantage of market opportunities and increasing market share.

3. Quartz crystal oscillator industry downstream demand is strong, domestic substitution acceleration, crystal oscillator leader continues to benefit.

(1) Policy plus emerging applications drive the development of quartz crystal oscillator industry, downstream applications such as 5G and automotive electronics are booming, and there is a strong demand for miniaturized and high-frequency products, and is highly optimistic about the prospect of the industry; (2) the acceleration of mid-and high-end domestic substitution, the company, as a leading company in the industry, relies on excellent customer accumulation and technological advantages to undertake market demand transfer and promote performance growth. (3) the overall supply and demand of the global market has improved, the profitability of the industry is on the rising channel, and the company has outstanding advantages in capacity scale, self-made equipment, self-production ratio and potential for subsequent expansion. (4) the headline trend of the company is more obvious, relying on the accumulation of technology and a full range of products and quality services to increase market share and share.

4. Investment advice: Crystal oscillator industry volume and price rise, optimistic that the company in the downstream demand + domestic substitution acceleration background, actively expand production, the gradual release of high-end product capacity, product structure continues to optimize, into a period of rapid growth. Taking into account the possible slowdown in demand for some models, rising costs and other factors, adjust the company's net profit forecast for 2022-2023 to 368 million yuan (the original value is 425,606 million yuan), maintaining the "buy" rating.

Risk tips: corporate governance risks; company expansion is not as expected; traditional industry changes and so on.