On the evening of March 25, Changfei Optical Fiber Co., Ltd. (hereinafter referred to as "Changfei Optical Fiber", 6869.HK, 601869.SH) announced its 2021 annual report.
In 2021, Changfei Optical Fiber achieved operating income of about 9.536 billion yuan, an increase of about 16% year-on-year; gross profit of about 1.872 billion yuan, an increase of about 13.6% year-on-year; net profit attributable to shareholders of the parent company of about 710 million yuan, an increase of about 30.3% year-on-year, and basic earnings per share of 0.94 yuan.
Overall, the international epidemic situation in 2021 is still severe, and the price pressure in the domestic market has not eased. Changfei Optical Fiber has successfully consolidated the global leading position in the main business of optical fiber and cable, made new breakthroughs in international business, improved the diversified business layout, and achieved revenue and profit growth by overcoming the cyclical pressure of the industry.
China Mobile's collection share ranked first, and the gross profit margin of some products exceeded 40%
Focusing on the communications industry, Changfei Optical Fiber is the world's leading optical fiber preform, optical fiber, optical cable and data communication related products R & D innovation and manufacturing enterprises, and has formed a complete industrial chain and diversified and international business model for the integration of optical communication related products and services such as rod fiber cables, integrated wiring, optical modules and communication network engineering.
In terms of industry, according to a report released by CRU in January 2022, the total global demand for fiber optic cables exceeded 500 million core kilometers again in 2021 after experiencing downward pressure since the second half of 2018, and the demand in major regions of the world has resumed its growth trend.
The development of the domestic communications industry in 2021 also shows a good trend, and the construction coverage and application popularization of new information infrastructure such as 5G and Gigabit optical networks have been comprehensively accelerated. Among them, mobile Internet traffic has achieved rapid growth in the case of a large base. According to data released by the Ministry of Industry and Information Technology in January 2022, the mobile Internet access traffic on the mainland in 2021 reached 221.6 billion GB, an increase of 33.9% over 2020. The average monthly mobile Internet household traffic (DOU) reached 13.36GB/month, an increase of 29.2% over 2020, and the DOU reached 14.72GB/household in December, a record high. At the same time, the mainland's 5G construction is steadily advancing according to the mode of moderate advancement, and in 2021, there will be more than 650,000 new 5G mobile communication base stations nationwide, and the total number of 5G base stations will reach 1.425 million, accounting for more than 60% of the world.
In October 2021, In the China Mobile collection and procurement, Changfei Optical Fiber won the bid share of 19.96%, ranking first, consolidating the leading market position of the main optical fiber and cable industry in the world. At the same time, Changfei Optical Fiber continues to improve the production process of preforms, optical fibers and optical cables, and improves the level of intelligent manufacturing to optimize production efficiency and cost structure. According to Tonglian data Datayes! In 2021, the gross profit margin of DF Fiber Preforms and Fiber Optic Segments was 40.39%.
In November 2021, Changfei Fiber was awarded the Top Ten Smart Benchmarking Factories in Wuhan. In May 2021, the full-process digital supply chain of Changfei Optical Fiber was selected into the list of the first batch of national supply chain innovation and application demonstration cities and demonstration enterprises released by the Ministry of Commerce, reflecting that the response speed and stability of its supply chain system are at the leading level in the industry.
In terms of technological innovation, on the basis of realizing the complete autonomy of the optical fiber industry chain, Changfei Optical Fiber has increased the research and development of new optical fibers for 5G, and in the field of communication optical fibers, the world's first dispersive flat fiber for 5G fronthaul, and the independent research and development of multi-core and low-mode fibers is leading the world. At the same time, the ultra-low attenuation and large effective area optical fiber formulated by Changfei international standards helped China Mobile Research Institute complete the world's longest 800G long-distance transmission technology research and testing, laying the foundation for the large-scale commercial use of 5G networks.
Next, the Changfei Optical Fiber Program supports the network interconnection in the national "double carbon" strategy and the "East Number West Calculation" project.
With the official launch of the "East Digital West Computing" project, the data center industry chain is long, the coverage is wide, and the driving effect is strong, and Changfei Optical Fiber, as a representative of the new infrastructure, is expected to fully benefit from the promotion of the "East Digital West Computing" project, which is conducive to its gross profit margin and profitability improvement from 2022 to 2023.
It is worth noting that changfei fiber high-end multimode fiber is widely used by domestic and foreign customers in the construction of large data centers. In the field of special optical fibers, the active three-clad optical fibers developed by the company have made technological breakthroughs and broken the overseas monopoly.
Diversified and multi-field enhancement of competitiveness
While ensuring the core advantages of the main business, Changfei Optical Fiber has continued to accelerate the pace of diversification in recent years and has achieved breakthroughs in many fields.
In 2021, Changfei Optical Fiber further improved its layout in the fields of optical modules and optical devices, communication network engineering, data center wiring, AOC consumer electronics, etc., and made new progress in optical modules, semiconductor quartz materials, submarine cables and other fields.
On the one hand, in the field of optical modules and optical devices, DF Fiber grasps the development opportunities of the data center market and the communication market, and will achieve continuous growth in operating income in 2021.
On the other hand, its subsidiary, Changchun (Wuhan) Technology Co., Ltd. (hereinafter referred to as "Changchun"), which is engaged in photovoltaic chips, modules, AOCs, integrated wiring and other related businesses, has continuously made breakthroughs in the application fields of ultra-high-definition video, virtual reality, medical systems, machine vision, data centers, etc., and its products have entered the supply chains of many well-known overseas large-scale customers.
In addition, DF fiber fiber and intelligent industrial control solutions and other related products and services have also been applied in the State Grid project, of which the State Grid Shaanxi - Hubei ± 800 kV UHVDC project using the company's G.654.E optical fiber, to achieve a breakthrough in single span of 467 km without relay long-distance transmission.
Changfei Fiber said that during the "14th Five-Year Plan" period, the company will take "technological innovation and digital transformation" as an important strategic measure in the development stage of the 14th Five-Year Plan, in the years of intelligent manufacturing exploration, the company will be the industrial Internet data collection capabilities and equipment management capabilities and 5G and all-optical network high-speed, large bandwidth, low latency, high reliability characteristics of the combination, breakthrough 5G + all-optical network formation, equipment management and data acquisition, simulation, digital twin, industrial big data and other key technologies, the formation of industry-leading "5G+." Guangyun Industrial Internet Platform".
Just this month, Changfei Optical Fiber acquired Wuhu TusS Semiconductor Co., Ltd. and Wuhu Terahertz Engineering Center Co., Ltd. to enter the third-generation semiconductor industry.
The above two enterprises are mainly engaged in the process research and development and foundry manufacturing of the third generation of semiconductor products represented by silicon carbide (SiC) and gallium nitride (GaN), with specialized foundry production capacity and technology research and development capabilities from semiconductor material epitaxial production, chip and device manufacturing to module packaging and testing, and the products will be mainly used in new energy vehicles and other fields. The acquisition will help enhance the company's core competitiveness.
Overseas revenue of 3.1 billion yuan hit a record high
Overseas markets are also the focus of Changfei Optical Fiber. According to CRU's forecast, the demand for fiber optic cables in all regions of the world is expected to grow in 2022, of which key regions such as China, the United States, India and Europe will grow at least 6%, and the global growth rate is expected to exceed 8%, the highest growth rate since 2017. For Southeast Asia, Latin America and other regions with low fiber penetration, the demand for fiber into the home and other related areas is expected to grow rapidly, and it is expected to continue to promote the construction demand for optical fiber cables and communication networks.
In 2021, Changfei Optical Fiber will enhance its international competitiveness through four differentiated strategies of breakthrough, deep ploughing, integration and cultivation, and make full use of the opportunity of market growth, and rationally coordinate production capacity planning according to the demand situation and profit level of major overseas target market regions such as Southeast Asia, Africa, and Latin America, and achieve rapid growth in overseas business revenue.
In 2021, the overseas business revenue of Changfei Optical Fiber reached 3.1 billion yuan, an increase of about 46.8% year-on-year, and for the first time reached more than 30% of the company's annual revenue, achieving a stage breakthrough. Among them, the company's overseas communication network engineering projects in Peru and the Philippines overcame the difficulties of the epidemic, completed the construction node target on schedule, obtained high recognition from local operator customers, and obtained follow-up project orders.
At the same time, in 2021, DFI Fiber also completed the acquisition of YOFC PolironIndú striae Comérciode Cabos Especiais Ltdda. ("DFI Polyron") in Brazil. Changfei Baolilong is a famous brand in Brazil and Latin America. Brazil and Latin America are one of the company's main overseas target markets, and the acquisition is the first production capacity layout of DF Fiber in the region, which is conducive to the company's further improvement of the internationalization strategy.
In view of the actual demand situation in Southeast Asia, Africa, Latin America and other places, the company is expanding the production capacity of optical fiber cables in Indonesia, and the construction of the company's optical fiber cable production facilities in Poland is also advancing as scheduled.
Changfei Fiber said that in the future, the company will further improve the localization capacity layout covering international target markets and regions to cope with logistics and policy risks. Through the smooth implementation and delivery of communication network engineering projects in the Philippines, Peru and other places in the early stage, the company's related business teams have grown rapidly, which will help the company to build overseas comprehensive service capabilities.
Attract capital to refresh the record for the highest financing of AOC
In addition to the sound operation, changfei optical fiber in 2021 reasonable use of capital market investment and financing channels is also worthy of attention.
In 2021, the fair value of Changfei Optical's holding of shares in Hangzhou Zhongxin Wafer Semiconductor Co., Ltd. increased by about 320 million yuan. In 2021, the company's subsidiary, Changxinsheng, completed the A and B rounds of financing in 2021, with a cumulative financing amount of about RMB600 million, setting a record for the highest financing in the field of AOC optical interconnection. At the same time, the science and technology innovation fund set up by Changfei Optical Fiber completed the investment in a number of enterprises, which strongly supported the development of the company's strategy.
In 2022, the global macro economy is still facing risks, the impact of the epidemic is still continuing, and the international situation is complex. Changfei Fiber said that the company will make full use of the opportunity of improving supply and demand in the industry, consolidate the global leading position of the main business, and continue to implement various major strategic initiatives. In terms of internationalization, the company will further improve the layout of overseas production capacity and build localized supply and service capabilities; in terms of diversification, the company will enter the third-generation semiconductor materials industry through acquisitions, and accelerate the construction of submarine cable construction capabilities and improve the diversified layout. With the recovery of industry demand and the optimization of supply structure, long-term sustainable development will be achieved.
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