Core Conclusions
The company continues to explore the field of Android headsets, and its performance for the full year of 2020 exceeded expectations. 1) The company achieved revenue of 1,934 million yuan in 2020, +55.59% year on year, exceeding previous expectations. Q1 of 2021 achieved revenue of 526 million yuan, +71.25% year on year, in line with expectations; net profit to the mother in Q1 2021 reached 78 million yuan, +58.68% year on year, and profitability continued to improve. 2) Judging from the changes in the revenue share of various businesses, the share of the headphone business continued to increase. The share of revenue in 2020 reached 61.84%, +6.82 pct over the previous year, and achieved revenue of 1,196 billion yuan, or +74.85% over the same period last year.
Attention is paid to product development and sales network layout, and the company's profitability continues to improve. 1) The company's sales expenses in Q1 2021 accounted for 47.18% of period expenses, +2.09pct over the previous year; R&D expenses in Q1 2021 accounted for 36.08% of period expenses, +3.22pct over the previous year; in 2020, the company's net profit margin was 15.05%, +5.24pct year on year. 2) The company adopts the “regional exclusive distributor system” marketing model. Currently, the company has hundreds of exclusive regional distributors in China, and the sales network covers all regions of mainland China. 3) The company has more than 400 technical and R&D personnel. These technology R&D personnel all have relevant professional education backgrounds, strong international customer communication skills, and rich practical experience. In 2020, the company had 431 R&D personnel, +17.12% over the same period last year.
The Android TWS headphone industry has reached an inflection point, and ramblers are benefiting from the advantages of their own technology and sales channels.
1) In the short term, Rambler is deeply involved in the Android TWS headphone market. As the industry chain matures and the overall price falls, it will be further recognized by the market. The product layout is high-end, and we think Rambler is expected to occupy a certain market share under the advantages of industry, technology and channels. 2) Looking at the long term, the strength of Android TWS headphone technology, supply, and demand is expected to further increase the penetration rate of Android TWS headsets. The future market capacity will reach more than 10 times, and the total market space will reach 600 million in 2021.
Investment advice: We forecast that the company's revenue for 2021-2023 will reach 2,755, 3798, and 4.816 billion yuan respectively, and net profit of the mother will be 388, 555 and 687 million yuan respectively, and the corresponding EPS will be 0.44, 0.62, and 0.77 yuan, maintaining the purchase rating.
Risk warning: TWS chip supply falls short of expectations; competitors enter; downstream customers change.