Cambridge Technology (603083): Fixed growth reinforces high growth autonomy and controllable depth benefits

Cambridge Technology (603083): Fixed growth reinforces high growth autonomy and controllable depth benefits

Event description On June 5, 2019, the company released the “Preliminary Plan for the Non-public Issuance of A Shares in 2019”.

Incident review is expected to increase the expansion of optical module production capacity and lay a solid foundation for high growth: the company plans to raise additional funds.

5 billion, of which about 6.

500 million US dollars is mainly used for high-speed data communication and 5G optical module capacity expansion of the Shanghai production base. The project construction period is one year. It is planned to achieve an annual output of 100G, 200G, and 400G optical modules of 101, 5, and 180,000. 5G fronthaulThe number of optical modules is 1.35 million, or it can bring incremental revenue of nearly 1.7 billion, driving the company’s high-speed optical module business and consolidating the company’s high-performance growth foundation.

Large customer acceptance was smooth, and independent controllable depth benefited: After the acquisition of related assets of Oclaro (Japan), the company’s large customer acceptance went smoothly. Following the breakthrough of Amazon’s batch shipment of 100G digital optical modules in May this year, Huawei’s 5G front optical transmission moduleThe tender successfully accepted Oclaro’s market share, and other major customers 北京桑拿洗浴保健 of equipment vendors and cloud service providers are making breakthroughs in succession. Under the controllable background, Huawei will increase the procurement of domestic high-end telecommunications backhaul optical modules.Module manufacturers may benefit in depth, and their market share may increase in the future. The company has a large number of customers in terms of asset purchases, a relatively even revenue share, and a strong ability to withstand single customer risks.

The company deployed overseas production bases earlier, and the opening of the Malaysian base helped to avoid possible future product pricing levies.

The size of small base stations is the largest, and wireless network equipment business continues to grow rapidly. In the 5G era, the market for small base stations is broad. Earlier 4G has great flexibility. The company successfully broke through with major customers of equipment vendors. 4G / 5G integrated small base stations achieved batch expansion. The scale is expectedThe estimated amount is 100,000-200,000. Taking into account the scale of equipment vendors, research and development strength, and customer resource advantages, the company may benefit from the increase in the market share of small substrate markets for customers of equipment vendors in the future. The business space is broad.Customer expansion or continuous high growth is expected to drive the company’s wireless network equipment business to continue high growth.

Profit forecast and investment advice: The company issued a fixed increase plan, which will help expand the capacity of optical modules after landing, or bring in incremental optical module revenue of nearly $ 1.7 billion, consolidating the foundation for high growth of the company’s performance; after the acquisition of Oclaro, the company has successfully undertaken Amazon, Huawei and other major customers, other equipment vendors and cloud service provider customers are continuing to make breakthroughs. Considering that the company has acquired a large number of assets and large-scale production bases in Malaysia, and has strong ability to resist external risks; the company’s 4G / 5G integrated small base station batch replacement,In the future, the market share of small base stations of beneficiary equipment customers will increase, and other wireless network equipment business will continue to grow rapidly.

It is estimated that the company’s net profit for 2019-2021 will be 1.

20, 1.

86 and 2.

60 ppm, corresponding to PE 34, 22 and 16 times, “Buy Rating”.

Risk Warning: 1.

“Huawei Incident” remains uncertain; 2.

Optical module capacity expansion was less than expected.