I. Overview of events
On February 7, 2021, the company signed the acquisition intention Agreement with Wentai Technology, in which the company plans to transfer the business assets owned by the company related to the supply of cameras to specific overseas customers to Wentai Technology.
II. Analysis and judgment
Key customer camera module stripping, focusing on high gross margin lens
After the divestiture, the camera business of the company will focus on the lens business and Android camera module business, and the company will focus more on the core business of optics and microelectronics in various fields such as consumer electronics and vehicles, continuously optimize its internal resource allocation and business structure, and increase the proportion of high value-added products. Although 2020H1 is affected by the epidemic, the company's lens business income of 360 million yuan, shipments of nearly 100 million, the company's lens business continues to expand production, 21 years is expected to high growth. The company previously announced an increase of 6.76 billion yuan to invest in businesses such as lenses and 3D sensors.
The optical industry continues to have a high boom, and the leading advantage is remarkable.
We are optimistic about the optical "track". The increase in the number of cameras and the upgrading of specifications have brought high growth in the industry. it is estimated that the market space for smartphone camera modules will reach 211.9 billion yuan by 2023. The lens production capacity of the company continues to expand, and the improvement of yield + specifications brings an increase in gross profit margin. At present, 6P products have been shipped with downstream customers. In addition, the company's plus 3D module is in line with the trend of optical innovation in mobile phones. With the improvement of photo requirements and the arrival of the AR era, the TOF module is expected to quickly infiltrate from the flagship model to the middle and low end.
III. Investment suggestions
We estimate that the company's revenue in 2020-22 will be $520,060 billion, and its net profit will be $8.5. 10.2 billion, with a corresponding valuation of 32-27-23, and with reference to SW Electronics' latest TTM valuation of 48 times in 2021-02-05, we believe that the company is undervalued and maintains a "recommended" rating.
Fourth, risk tips:
The progress of production expansion is less than the expected risk, the terminal demand is less than the expected risk, and the impact risk of COVID-19 epidemic.