Main points of investment:
The situation improved significantly, with shipments rising sharply in November and December:
With the issuance of 4G licenses and the finalization of spectrum division, the company's shipments have increased significantly in the past two months, with shipments rising from tens of millions of yuan in November to 1.5 yuan and 1.6 yuan to 170 million yuan in December, respectively. The situation has improved significantly. At the same time, we expect the peak of 4G construction to be concentrated in 2014 and 2015.
Thanks to the construction of TD-LTE base stations, 2014 performance is expected to break out:
We estimate that China Mobile Limited and China Telecom Corporation will each be able to build 300000 TD-LTE base stations in 2014, while the company expects to gain a 20% market share. If calculated at a price of 1000 yuan per antenna, the company's TD-LTE antenna business will achieve revenue of about 360 million yuan in 2014.
In addition, due to the positive correlation between RF subsystem revenue and antenna business revenue, it is expected that the company's TD-LTE RF subsystem revenue will also achieve about 400 million yuan in 2014. To sum up, the company will record a significant increase in revenue in 2014, while the gross profit margin of the company's products will also rise somewhat, and the company expects a relatively small increase in expenses in 2014, so the company's performance will improve significantly in 2014. As the proportion of multi-frequency and multi-mode TD-LTE products increases and FDD-TLE products begin to be delivered in the future, the company's gross profit margin has room for further improvement. The target price is HK $2.73 and the rating is highly recommended:
We believe that the 2014 performance is highly deterministic, and the average PE of the industry in 2014 is 12 times, so we give the company 12 times the same PE as the same industry in 2014, with a target price of HK $2.73, which is 59.7% higher than the current price, and is highly recommended.
