Guangxun Technology (002281) 2019 Third Quarterly Report Review: Performance Meets Expectations, Optimistic Transmission Recovery + Wireless Side Construction

Guangxun Technology (002281) 2019 Third Quarterly Report Review: Performance Meets Expectations, Optimistic Transmission Recovery + Wireless Side Construction

Event: The company released the report 天津夜网 for the third quarter of 2019. In the first three quarters, it achieved revenue of $ 3.9 billion, a continuous increase of 6%; net profit attributable to shareholders of listed companies.

7 trillion, an increase of 1% a year.

Among them, Q3 achieved revenue of 1.4 billion yuan in a single quarter, an increase of 16% year-on-year; net profit attributable to mothers in a single quarter1.

200 million, a decrease of 2% previously; in line with expectations.

  The gross profit margin has rebounded, and the reduction of government subsidies has affected the release of profits. The company’s revenue has maintained steady growth in the first three quarters, with a combined gross profit margin of 19.

84%, further increase every year.

The first three quarters of sales expense ratio 2.

82% (+0 compared to the same period last 北京夜生活网 year).

1pct), management expense ratio 2.

25% (0% compared to the same period last year).

17pct), R & D expense ratio is 8% (+0 compared to the same period last year).

24pct), the overall cost of expenditure continues to increase.

Due to the additional reduction of government subsidies included in the current profit and loss, the increase in other income in the first three quarters decreased by 36.3 million, which affected the release of profits.

  The domestic transmission network investment has grown significantly. The independent network of 5G will increase the prosperity. In 19 years, the capital expenditures of the three major operators have expanded and maintained a steady growth. Among them, the wireless lateral transmission speed has penetrated, while the capital expenditures such as transmission networks have increased significantly.Among them, the investment in China Mobile’s transmission network has dropped by about 12% each year.

At present, the domestic 5G deployment still uses NSA. It is expected that the construction of 5G independent networking will start in 2020, driving the transmission network investment into the boom cycle, and the company’s transmission network business (about 60% of revenue) will benefit significantly.

  The 5G wireless side optical module is incrementally expanded, and the front / middle / backhaul gate algorithm is gradually improved to 5G base station architecture changes. The number and volume of front / middle / backhaul optical modules required for a single base station are reduced by 4G. We estimate that if 2020The scale of domestic 5G base station construction is 800,000 stations, bringing about 55% of the market demand for wireless optical modules.
9 billion yuan.

As the front / middle / backhaul rate and gate performance are gradually improved, the size will gradually be concentrated.

The company’s optical transceiver modules for 5G fronthaul (wireless access layer), middle backhaul (aggregation layer + core network) and other scenarios are used to achieve full model coverage. 5G mainstream product verification and scale sales are completed at key customers. 50G products pass verification.
  Maintain “Buy” rating We continue to be optimistic about the company’s layout in the field of high-speed optical chips and business development changes brought about by 5G. Considering that the government subsidy obtained by the company has decreased significantly since this year, it is reduced by 19?
21-year net profit forecast by 4.

07/5.

66/6.

26 to 3.

59/5.

35/5.

82 ppm, corresponding to PE51X / 34X / 31X, maintaining the “Buy” level.

  Risk reminder: intensified frontline competition, Hisense competition pressure, new material light modulation chip replaces risks