Quectel(SH:603236) Shanghai Securities·2025-03-06 07:23Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage [1][7]. Core Insights - The company is a leading provider of IoT solutions in China, holding a dominant position in the global IoT module market, with products spanning cellular modules, automotive pre-installed modules, and smart modules, among others [5][19]. - The IoT industry is experiencing significant growth, driven by clear development paths and a well-defined industrial chain, with continuous expansion in IoT connections across various application fields [5][61]. - The company is entering a rapid expansion phase, with its modular products penetrating emerging fields, supported by a robust global R&D network and a diverse product matrix [6][20]. Summary by Sections Company Overview - The company, founded in 2010, has established a comprehensive global service network and has launched various successful IoT products, including GSM/GPRS modules and multi-mode LPWA modules [20][21]. - The revenue has shown a strong growth trajectory, with a five-year CAGR of 38.69%, despite a temporary decline in 2023 due to external economic factors [23][24]. Industry Analysis - The IoT market in China is projected to grow significantly, with a market size increase from 351.52 billion yuan in 2019 to an estimated 508.90 billion yuan in 2023, reflecting a CAGR of 9.69% [52][54]. - The report highlights the importance of policy support for the IoT sector, emphasizing its role in digital transformation and the integration of new technologies [45][46]. Financial Projections - The company is expected to achieve revenues of 185.64 billion yuan, 225.49 billion yuan, and 267.26 billion yuan for the years 2024 to 2026, with corresponding net profits projected at 5.48 billion yuan, 7.11 billion yuan, and 9.04 billion yuan [7][9]. - The report anticipates a significant increase in net profit growth rates, with projections of 503.77% in 2024, followed by 29.88% and 27.16% in the subsequent years [7][9]. Competitive Positioning - The company is positioned as a leader in the IoT module market, with a strong emphasis on R&D and a diverse product offering that includes AI and smart modules, which are expected to drive future growth [59][60]. - The report notes that the company has a stable shareholding structure and a management team with extensive technical and managerial experience, which is crucial for navigating the competitive landscape [39][42].