The rise in the volume and price of the company's optical module products has brought marginal improvement in performance, giving the "overweight" rating for the first time.
The company laid out in advance, cut into the field of optical modules through two mergers and acquisitions, global R & D strategy to ensure core competitiveness advantages, with a wide range of optical module products to meet market demand. The company will become a high-end optical module supplier of Huawei in 2019, and it is expected to unlock more downstream customers such as ZTE Corporation in the future, opening up new growth space in the market. Due to the resonant demand for data center and 5G base station construction, the optical module market ushered in the beginning of a high boom. With the vigorous promotion of new infrastructure, the construction of data center and 5G is in full swing. Optical module will also gradually upgrade from low speed to high speed to meet high-speed business needs, and the company's optical module products are expected to bring marginal improvement in performance. We predict that the net profit of 2020Universe 2021 in 2022 will be RMB 221,300 million, with a year-on-year increase of 508.5%, 67.4%, 35.5% and 0.68, respectively, with a corresponding PE of 61.3, 36.6, 27.1 and 27.1 times, respectively, compared with comparable companies. Coverage for the first time, giving a "overweight" rating.
Mergers and acquisitions will continue to increase the optical module track, ushering in the rebirth of Nirvana
The company began to develop optical devices in 2009, acquired part of the assets and technology transfer of MACOM Japan in 2018, and became a global 100G high-speed optical module and optical module technology leader; through the acquisition of part of the assets and technology transfer of Oclaro Japan in 2019, the company took the lead in 400G and optical modules based on the latest PAM4 modulation technology. At the same time, 750 million private fundraising has been basically completed recently to meet the needs of optical module production line expansion. Generally speaking, the company conforms to the industry trend of greatly increasing market demand for optical modules, and the global layout is expected to open up a new situation of high performance growth.
The high prosperity of data telecommunications drives the expansion of optical modules, and the future performance is expected to improve marginally.
In terms of Datong market, benefiting from the promotion of data center construction by "new infrastructure", the market demand for high-speed optical modules is expected to soar; in the telecommunications market, benefiting from the rapid construction of 5G base stations and the upgrading of transmission carrier networks, the company actively distributes carrier-grade optical modules and becomes one of Huawei's high-end optical module suppliers, with customers' continuous breakthroughs, the company is expected to squeeze into the leading supplier series in the telecommunications market. Generally speaking, the company's optical module products are gradually recognized by customers, and the market space is expected to be further opened, bringing marginal improvement in performance.
Risk hint: the high risk of the concentration of sales customers, the risk that the progress of M & An integration is not as expected, and the risk of loss of accounts receivable.