Event description
On the evening of October 16, the company released its three-quarter report for 2010. in the first three quarters, the company realized operating income of 2.12 billion yuan, down 1.49% from the same period last year. Its net profit was a loss of 126 million yuan, compared with a loss of 9.23 million yuan in the same period last year. The loss was 148 million yuan after deducting non-net profit, compared with a loss of 17.99 million yuan in the same period last year.
Event comment
The traditional business is dragged down by the external environment, and the optical module revenue falls short of the target: 2020Q3, the company achieved revenue of 700 million yuan, down 1% from the same period last year and 18% from the previous month, which is lower than the company's previous work target, or mainly due to: 1) affected by COVID-19 's epidemic situation and changes in the market environment, the revenue of some of the company's domestic JDM products (mainly for Huawei) has declined significantly. 2) due to insufficient supply of key components such as chips, customer orders for some wireless products will be postponed to Q4; 3) the overall growth of the Q3 optical module market is lower than expected, and the company's optical module business revenue has increased by more than 50% compared with the same period last year, but still failed to meet the original target. According to the company announcement, the Optoelectronics Division has completed most of the commissioning of production equipment during the Q3 period, and product delivery has increased month by month since August. It is expected that Q4 delivery will continue to increase or lead to Q4 revenue month-on-month improvement.
The depreciation of the US dollar leads to a sharp increase in financial expenses, which is a further drag on the performance: 2020Q3, the company realized a net profit loss of 68.3 million yuan, compared with a loss of 15.06 million yuan in the same period last year; realized a loss of 74.49 million yuan in non-net profit, compared with a loss of 17.99 million yuan in the same period last year, the overall performance declined more than the revenue end, or mainly due to: 1) due to the impact of rising prices of raw materials and unsaturated capacity utilization, Q3 gross profit margin fell 2.26pct compared with the same period last year. 2) under the influence of the sharp depreciation of the US dollar since Q3, the company's financial expense rate has increased 6.99pct compared with the same period last year. With the completion of the commissioning of the company's optical module equipment, it is expected that Q4 capacity utilization may be improved, superimposed exchange rate factors or eliminated, the company's profitability is expected to be improved.
Profit forecast and investment advice: 2020Q3's traditional business is dragged down by the external environment, and the optical module revenue does not meet the target, resulting in lower-than-expected revenue performance. The rise in the price of raw materials, the unsaturated utilization of capacity and the sharp depreciation of the exchange rate are a further drag on the company's performance. With the completion of the commissioning of optical module production equipment and the gradual elimination of external unfavorable factors, the company's revenue and performance are expected to be gradually released, the company's high-end product layout is perfect, and still has medium-term growth potential. The company is expected to achieve a net profit of-0.88,1.39 and 305 million yuan in 2020-2022, corresponding to 38 and 17 times of PE in 2021-2022, maintaining a "buy" rating.
Risk hint
1. The company's production capacity is not as good as expected.
two。 Traditional business has fallen more than expected.