Cambridge Technology (603083): The steady growth of traditional business, the layout of optical modules creates new glories
Report Summary: Traditional ICT business has grown steadily, reducing costs and increasing efficiency through multiple channels, and improving profitability.
According to ICCSZ statistics, in recent years, the number of fixed broadband users worldwide has remained at 2.
5% growth rate, the domestic penetration rate reached 86%, the future upgrade to Gigabit Internet upgrades and growth; home gateways grow rapidly, the domestic penetration rate is still around 20% low; the global WIFI equipment market remains at 4.
The global ICT business is still booming. The company is deeply tied to the major global ICT terminal suppliers. The sales share of the top five customers is stable at about 85%, and the growth is sustained.
In addition to stabilizing demand, the company through technological innovation (early introduction of the BOB concept in developing countries), production capacity transfer (ICT terminal business transfer to Wuhan, Xi’an), intelligent production automation, and adjustment of procurement mode (JIT mode reduces inventory).Achievements in cost control have brought about improvements in profitability.
Merger and acquisition of leading optical module assets is expected to usher in a big profit explosion.
The high-speed construction of global cloud vendors’ data centers and 5G construction have driven the optical module market to grow steadily.
According to Lightcounting’s forecast, the global optical module market will reach $ 12 billion by 2022, maintaining a growth rate of about 10% in the past three years.
The company invested in high-speed optical module business in 2017, and acquired MACOM Japan assets and Oc laro Japan assets successively in 2018 / March 2019, which greatly improved the design and packaging strength of optical modules and components, which can take 成都桑拿网 advantage of the company’s good costControl capabilities and customer resource advantages are expected to usher in the future.
In the field of small base stations, there is great promise in the 5G era.
In the 5G era, everything is interconnected, and the high density, easy deployment and size of small base stations are highly in line with the needs of 5G development. The number of domestic small base station deployments in the 5G period may reach tens of millions.
The company launched a full range of indoor and outdoor micro base stations and pico base stations as early as the 4G period, forming a stable supply channel in developed areas such as Japan and South Korea; small base stations jointly developed with Nokia during the 5G period can be smoothly upgraded to 5G technologyIt is expected to share the great potential of the small base station market.
Profit forecast: It is expected that the net profit attributable to mothers for 2019-2021 will be 1.
USD 2.5 billion, currently expected to correspond to a dynamic PE of 36X / 20X / 14X, covering for the first time, giving a “Buy” rating.
Risk warning: M & A integration is less than expected; 5G and datacom markets are less than expected.