Quectel Communications (603236): The module industry is generating rapid growth in revenue, and it is looking forward to 5G new application scenarios.

Quectel Communications (603236): The module industry is generating rapid growth in revenue, and it is looking forward to 5G new application scenarios.
On October 30, the company released three quarterly reports.The company’s revenue from Q1 to Q3 2019 was 28.5.5 billion, a year-on-year increase of 53.32%; net profit attributable to mother 0.930,000 yuan, -15 compared with the same period last year.32%, net profit after deduction is 0.880,000 yuan, -18.06%.Among them, 2019Q3 achieved revenue of 11.470,000 yuan, 40 compared to the same period last year.2%; net profit attributable to mother 0.150,000 yuan, -68.0%. The rapid development of the Internet of Things industry, the company’s sales scale continues to expand, high-margin products in overseas markets are driven, and gross profit maintains steady growth. The company’s overall operating conditions in the first quarter to the third quarter of 2019 have improved significantly compared to the same period last year.Due to the rapid development of the Internet of Things industry in 2019, the company’s sales scale has continued to expand, and its revenue in the third quarter of 2019 was 11.470,000 yuan, 40 compared to the same period last year.2%; gross margin is 21.97%, an increase of 2.04pct, which is higher than domestic IoT module manufacturers, and has significant product competitiveness and overseas channel expansion effects. The company’s operating costs increased, and its net profit was less than expected in Q3 2019.150,000 yuan, -68.0%; net profit margin 1.3%, down 4.45 points.Firstly, the company’s sales scale has expanded, and operating costs and research and development expenses have increased significantly.On the expense side, management expenses and R & D expenses increased significantly compared with the same period last year, and even increased by 114.14% and 110.29%; mainly due to the increase in the number of company management personnel and salaries, the addition of office space, the increase in site rent and the continued expansion of research and development contributions. The company’s 2019Q3 sales rate is 4.8%, year-on-year.3%; management fee rate 5.8% year-on-year.0%, mainly due to the increase in employee compensation and site costs; financial rate 1.6%. Year-on-year 2.3%, mainly due to the impact of international exchange rate fluctuations. The company continues to increase R & D investment, and the sales area covers the world. The company has always been committed to R & D innovation and technological upgrades, and the R & D has been increasing.220,000 yuan, 0 research and development investment in 2019Q3.920,000 yuan, 110 compared to the same period last year.29%, R & D expenses accounted for 8.0%, year-on-year 2.6%.According to the company’s semi-annual report for 2019, the company has 85 patents, 108 software copyrights, and has many years of experience in the development of cellular communication modules. It has formed a large-scale research and development strength in communication technology, radio frequency technology, data transmission technology, and signal processing technologyAnd technical advantages.The company’s various product technologies are leading the industry, especially in the fields of NB-IoT modules, intelligent modules, automotive front-loading modules, 5G modules, etc., the company has the first-mover advantage. The company has established a global coverage of sales staff and technical service personnel, which can provide customers with timely and accurate services.As of June 30, 2019, the company has developed more than 5,000 end-use customers, and its sales area covers China, Europe, Asia, Africa, and North America. The company experienced an IPO, and its cash flow significantly improved the company’s closing cash balance and operating, investment, and financing activities in the third quarter of 2019. Net cash flows from operating activities have changed significantly, including operating activities -2.870,000 yuan, -378 compared with the same period last year.38%; net cash flow from investment activities -1.640,000 yuan, -320 compared with the same period last year.51%; net 杭州桑拿 cash flow from financing activities9.810,000 yuan, an increase of 9710.0%.The main reason is the expansion of the company’s business scale, which requires stocks and materials to be prepared in advance; employees’ salaries have increased significantly; the company’s initial public offering of shares and investment banking wealth management products.The cash content ratio of the company’s 2019Q3 sales income is zero.98, a slight increase from the same period last year. Earnings forecast and forecast The IoT industry has developed rapidly in the past two years. The company itself is a leader in domestic cellular modules and has been developing overseas markets; it is expected that future revenue will continue to rise, and its operating income forecast for 2019-2021 is 41.2.4 billion, 60.1.8 billion and 81.3.7 billion, the estimated net profit attributable to mothers is 2.07 billion, 2.6 billion and 3.3.7 billion, with an estimated PE of 71.47, 56.94 and 43.97 times.Taking into account the fierce competition in the existing company’s industry and the stability of the industry structure in the future, the company’s average gross margin and net profit margin will increase, so it is given an “overweight” rating. Risks suggest that 5G construction is less than expected; the company’s overseas market is affected by the trade war; the module industry in which the company is located will intensify future competition.