类别:公司 机构:兴业证券股份有限公司 研究员:WANG Sheng 日期:2019-12-23

Company Profile

    Quectel (the company)is the leading global supplier of cellular and GNSS modules, with a broadproduct portfolio covering the most recent wireless technologies of 5G, LTE/LTE-A, NB-IoT/LTE-M,UMTS/HSPA (+), GSM/GPRS and GNSS. As a professional IoT technology developer and cellularmodule supplier, Quectel is able to provide one-stop services for IoT cellular modules. Quectelproducts have been widely applied in IoT/M2M fields including smart payment, telematics andtransport, smart energy, smart cities, security, wireless gateways, industry, healthcare, agriculture,and environment monitoring.


    As a leading player in cellular modules, its high growth is prospective. Quectel, a black horse in cellularmodules, surpassed Sierra, a leading player in the industry, in 2018 and leapt to the global shipmentschampion. The company’s compound growth rate of operating profits during 2016-2018 was higherthan 200%, and in Q319 alone, the company realized operating income of CNY 2.855bn, more thanthe total annual income of 2018.

    Taking advantage of 5G Internet of Things (IoT), cellular modules of IoT secure the top position. In thecontext of 5G, the efficient fusion of big data, mobile internet, cloud computing and intelligencespeeds up the expansion of IoT industry. Positioned at sensing connective layer, cellular modules arewidely used in multiple fields such as transport, smart payment, intelligent metering, sharingeconomy and smart cities. Benefited from the first move, and with huge development potential, it isestimated by TSR that by 2022, the shipments of cellular modules would reach 313 million, doublingthat of 2017.

    All-round strengths form technological advantages, which facilitates the company’s global expansion. Overseas manufacturers retreated one step by another in the fierce competition with China’s cellularmodule enterprises who boast a great number of engineers. The company, by virtue of all-roundstrengths, has seized a leading market position in the global expansion. The founding team of thecompany specializes in technologies, and their consistent and high-intensity input has forged awell-established product layout, intelligent property right (IPR) and global certification system, layinga solid foundation for its high-speed development; as module products have obvious customizedfeatures, the targeted and localization services for 24 hours and 7 days help the company formstronger technological strengths; depending on its scale effects strengthened by global sales network, the company is expected to give efficient feedbacks to its inherent advantages; self-built intelligentmanufacturing center helps not only secure the supplier chain safety, but also enhance its industrialchain position and accelerate R&D progress, therefore, establishing an overwhelming strength is justaround the corner.

    Earnings forecast and investment recommendationFor Quectel whose present aim is to seize market shares not gain profits, PS is more suitable for thecompany. We estimate that the company’s annual income to be CNY 4.228bn/ CNY 5.815bn / CNY8.016bn for year 2019/2020/2021, implying a P/S ratio to be 3.12X/ 2.27X/1.64X and a P/E ratio to be97.5X/57.1X/37.4X respectively. After listing on the market for half a year, the company has beenselected into SSE 380 Index, and obtained nice liquidity. We give “Outperform“ rating for thecompany.

    Potential risks: slower-than-expected development of IoT; exchange rate fluctuations; trade frictions;outflow of talents and technologies.