\u3000\u3000 Shengyi Technology Co.Ltd(600183) (600183)
The company issued the performance forecast for 2021, followed the market rhythm, achieved high profits and maintained the “buy” rating
The company released the performance forecast. It is estimated that the net profit attributable to the parent company in 2021 will be 2.62-2.9 billion yuan, yoy + 56 ~ 73%, and the net profit deducted from non attributable to the parent company is expected to be 2.40-2.66 billion yuan, yoy + 49 ~ 66%. Considering the continuous decline in the price of 2021q4 traditional copper clad laminates, we lowered the profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.81/32.9/37.7 (the previous value is 3.07/35.8/39.3) billion, the corresponding EPS will be RMB 1.21/1.42/1.63 (the previous value is 1.33/1.55/1.70), and the current share price will be 16.9/14.5/12.6 times PE. The company is a leading domestic manufacturer of copper clad laminates. Benefiting from the price increase of FR-4 products, the company’s supply capacity is diversified, and the synergy advantage of the industrial chain is significant. It is gradually moving forward to the material solution provider and maintaining the “buy” rating.
The differentiation of downstream demand led to the decline of Q4 single quarter profit month on month, and the company actively adjusted its response strategy
The company’s 2021q4 attributable net profit center is expected to be 420 million yuan, and the deduction of non attributable net profit center is expected to be 400 million yuan, down from 2021q3. The application boom of downstream consumer products and communication products is differentiated. On the one hand, 2021q4 downstream consumer products did not enter the market due to the pressure of goods on the port in the early stage, and the demand for copper clad laminates was overdrawn in the early stage, resulting in a sluggish peak season; On the other hand, the construction of data center around 5g applications was started, and the demand for server products recovered. The price of products represented by traditional FR-4 copper clad laminate is weak and the profit is declining, while the demand for high-speed copper clad laminate products is gradually booming. The company actively responds to the cost pressure of upstream raw materials and changes in downstream applications, focusing on the promotion of automotive, mini led and IC packaging substrate products, which is expected to get rid of the price cycle disturbance of traditional FR-4. In January 2022, the eighth phase of 5g high-frequency and high-speed substrate research and development and industrialization of substrate materials for high-density packaging carrier sector of Songshanhu No. 1 plant of the company has achieved the capping of the main body.
Product structure optimization may become a bright spot in 2022, and the company’s valuation is expected to improve
Throughout 2021, the company’s profits continued to release. Due to the cyclical nature of copper clad laminate price increase, the company’s valuation continued to be under pressure. The company further expands its competitive advantage through group integration, and changes from the role of catcher of overseas manufacturers to the leader of independent research and development. We expect that under the business strategy of “becoming stronger and bigger”, the overall profitability and roe of the company will continue to rise steadily in the future, fully reflecting the growth and supporting the valuation of the company.
Risk warning: the construction rhythm of downstream base stations slows down; Weak downstream demand; Rising prices of raw materials; The company’s new product introduction is less than expected.
