\u3000\u3000 Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) (603267)
Event: on January 21, the company released the performance forecast for 2021.
The annual performance is expected to increase by 65% – 71%, and the Q4 performance is in line with the historical law
The net profit attributable to the parent company is expected to be RMB 800-830 million in 2021, with a year-on-year increase of 65% – 71%. In a single quarter, Q4 is expected to realize a net profit attributable to its parent company of 143-173 million yuan, a year-on-year decrease of 13.84% to an increase of 4.24%, and a decline month on month. We believe that the decline in performance is a reasonable performance, and the historical law can be followed. The performance in the fourth quarter is basically the low point of the whole year. The law has failed due to the epidemic in the first half of the year in 20 years, and will remain the historical law in the future. In addition, the annual equity incentive fee of more than 21 million is expected to affect the apparent performance.
“14th five year plan”: the new generation of weapons and equipment has brought increased consumption, and military electronics has ushered in the best growth stage
The 14th five year plan and the outline of long-term objectives for 2035 pointed out that during the 14th Five Year Plan period, our army should comprehensively strengthen military training and preparation, determine a new node for the goal of building the army in 2027, accelerate the upgrading of weapons, accelerate the development of intelligent weapons, accelerate the development of strategic subversive weapons and equipment, and accelerate the integrated development of mechanization, informatization and intelligence. The new generation of weapons and equipment may have a high boom in the long term of the 14th five year plan and 2035. Among them, military electronic components are expected to be the main implementation carrier of informatization in all kinds of new equipment during the 14th five year plan. They have the logic of double increase in the proportion of unit equipment value and equipment production scheduling. The industry trend refers to other mature fields of informatization, such as smart phones Application trend of automotive electronic components.
The release of downstream capacity promotes the further acceleration of self-produced business, and the agency business continues with the high prosperity of downstream customers
In terms of military products business, the downstream demand has increased significantly since the second half of 2020, and the company’s performance has increased rapidly for two consecutive years. It is speculated that the military MLCC market has increased significantly. We believe that with the gradual release of downstream customer capacity, orders are expected to rise again, and the company’s self-produced business may show a sustained and rapid growth trend. In addition, the company continues to expand new categories, such as single-layer SLCC and RF MLCC. Among them, high-power RF microwave multilayer ceramic capacitors have been supplied in small quantities, with significant domestic substitution space.
In terms of agency business, the company acts as an agent for multiple product lines of many international well-known manufacturers, operates dozens of product types, cooperates with more than 1000 customers, and newly signs brand agents such as Amphenol and price, so as to expand product types and industry fields horizontally. We believe that the company’s agency business has rich product categories and has a good customer base, which is expected to achieve sustained high growth with the improvement of downstream demand.
The first equity incentive plan after listing binds the interests of core employees again
The company has completed a round of equity incentive before listing. This equity incentive plan grants 928000 restricted shares to 99 core backbones again. The unlocking conditions are that based on 2020, the revenue growth rate in 21-23 years is not less than 30% / 69% / 120% respectively, or the net profit growth rate is not less than 35% / 76% 128% respectively, and the corresponding three-year compound growth rate is 30% and 31.6% respectively. The company binds the core backbone interests and can expect long-term development.
Profit forecast and rating: To sum up, as the core supplier of China’s military MLCC, the company’s military products business is expected to fully benefit from the demand drive of leapfrog weapons and equipment in the 14th five year plan, and is expected to continue to increase in volume in the next 3-5 years; It is expected that the business of private products will continue to grow rapidly and gradually break through the market segmentation of private products. According to the performance forecast of year 21 and the expectation of orders and shipments brought by the release of downstream capacity, we adjusted the operating revenue from 2686 / 3642 / 4764 million yuan to 2579 / 3703 / 4847 million yuan, the net profit attributable to the parent company from 880 / 1233 / 1655 million yuan to 819 / 1266 / 1700 million yuan, the corresponding EPS was 3.52/5.45/7.32 yuan, and the corresponding PE was 46.17/29.87/22.24x, maintaining the “buy” rating.
Risk warning: the risk of price reduction of military products; Risk of changes in downstream market demand of agency business; Risk of large balance of accounts receivable; The performance forecast is the preliminary calculation result, which shall be subject to the annual report.
