① Due to factors such as the slowdown in the growth rate of the wireless access network market and industry inventory removal, orders for RF device products in Wuhan Fangu declined, and net profit to mother fell by 70% throughout the year. ② The company's R&D expenses and financial expenses increased year-on-year last year, and the impact of 5.5G related technology, which has received a lot of attention from the market, on performance remains to be seen.
Finance Association, January 26 (Reporter Fu Jing) Against the backdrop that the peak 5G investment period for operators has come to an end, orders for RF device products in Wuhan Fangu (002194.SZ) have declined. Net revenue and profit have both declined since the second quarter of last year, and net profit to mother has dropped 70% for the whole year.
According to the performance forecast released by Wuhan Fangu this evening, net profit returned to mother last year was 82 million yuan to 92 million yuan, down 66.69% to 70.31% year on year; net profit after deduction fell 69.23% to 73.04% year on year. The company said that the growth rate of the wireless access network market is slowing down. At the same time, due to factors such as industry inventory removal, orders for the company's RF device products have declined, and revenue also decreased by about 486 million yuan over the same period last year.
According to information, the RF device manufacturing industry in Wuhan Fangu is located in the upper reaches of the communications industry chain. The products it delivers are integrated by equipment integrators and installed in mobile base stations invested and built by mobile operators, and the scale and speed of investment in communication network infrastructure directly affects the scale of the RF device manufacturing industry. The company has also disclosed many times before that its main customers are downstream mobile communication equipment integrators in the communications industry, such as Huawei, Ericsson, Nokia, etc., and the downstream customer market concentration is high.
Meanwhile, a reporter from the Financial Services Association recently learned in various interviews that operators' capital expenses will remain steady or even slightly reduced this year, and the focus will shift from communication infrastructure construction to computing power infrastructure construction.
According to the latest data from the Ministry of Industry and Information Technology, as of the end of last year, the number of 5G base stations in China reached 3.377 million. According to the Communications Industry Network report, “Theoretically, if we want to reach the current 4G network coverage level, then the number of 5G base stations required will be far more than 10 million, and the 5G base station gap is still huge.” However, the peak period of 5G investment has passed, and it is a fact that 5G base station construction is slowing down. Based on the recently disclosed telecommunications equipment business performance forecasts, manufacturers such as Huamai Technology (603042.SH) and Pingji Information (300571.SZ) were also under pressure last year due to the slowdown in 5G investment.
Meanwhile, Wuhan Fangu revealed that R&D expenses increased by about 8.68 million yuan year on year and financial expenses increased by about 21.94 million yuan year on year last year (mainly due to a decrease in exchange income due to fluctuations in the US dollar exchange rate and a decrease in interest income from financial institution deposits); the total amount of accrued credit impairment losses and asset impairment losses increased by about 10.41 million yuan year on year.
According to the 2023 semi-annual report, the gross margins of the three main products of Wuhan Fangu, duplexers, filters, and RF subsystems all declined, falling 0.67%, 6.65%, and 0.26%, respectively. In response, the company explained to the media that the decline in gross margin was mainly due to increased competition in the industry.
Relevant statistics show that in 2022, the company's revenue from Huawei reached 1,045 billion yuan, accounting for 50.41% of total revenue. It is worth mentioning that Wuhan Fangu is also a 5.5G concept stock promoted by Huawei in the early secondary market. It stated on the Interactive Easy platform that the company's corresponding products already have 5.5G technology, and related products have also been applied to customers' 5.5G systems at this stage. However, since its commercialization process will take time, the impact of related technology on performance remains to be seen.