Shenzhen Inovance Technology Co.Ltd(300124) (300124)
Overweight pneumatic components business and improve the product layout of optical, electromechanical and hydraulic integration. According to the official website of Muqi precision, by the end of October, Muqi precision had become a wholly-owned subsidiary of Shenzhen Inovance Technology Co.Ltd(300124) . Muqi precision (Shenzhen), founded in 2015, is mainly engaged in pneumatic components, electric slide, lead screw slide and other automation components, and supplies 3C manufacturing enterprises such as Foxconn, Huawei and Lens Technology Co.Ltd(300433) to form a stable supply relationship with leading enterprises in the industry. The introduction of Muqi precision pneumatic components and other products has improved the optical (encoder) machines in the general automation field of the company The integrated product layout of (lead screw motor, etc.) electric (frequency converter, servo, etc.) hydraulic (hydraulic injection molding machine, etc.) promotes the expansion of the company’s product line from single point products and some solution products to the overall product of industrial automation.
Energy SBU focuses on the dual carbon direction, and the energy storage business starts again. The company established a new energy SBU this year, including business lines such as power, coal mine, photovoltaic, lithium battery and energy storage, with an overall layout around the dual carbon direction. Among them, the energy storage business had a layout in 2012. After the midway strategic contraction, it started again this time, with 1000V and 1500V energy storage inverter products, and won the annual best energy storage high-power bidirectional converter supplier award of the eighth international optical storage and charging conference. In the future, it is expected to tap the dislocation competitive advantage in the needs of industrial digitization and energy management on the user side.
The manufacturing industry is under periodic pressure, and the growth direction of the company remains unchanged. The PMI in September and October were 49.6 and 49.2 respectively, falling below the boom and bust line one after another due to the shortage of key materials such as chips, the constraint of dual control of energy consumption and the gradual decline of the power to replenish inventory. Based on the pressure of the industry, the growth center of the company is expected to move down month on month, but the growth trend beyond the industry remains unchanged, and the excess growth comes from structural factors. In terms of industry structure, the growth rate of emerging industries such as lithium battery, photovoltaic, mobile phone and semiconductor remains high. The company has made progress around the top enterprises in these sub industries and the layout of their supply chain, which is expected to continue to anchor the prosperity of the industry. In terms of market structure, the company grasped the advantage of chip inventory in the first half of the year to replace the market share of some foreign brands. At the same time, it formed a competitive advantage over some domestic brands in terms of product system and sales strategy, and the total market share is expected to continue to increase.
Profit forecast. It is estimated that the company will achieve revenue of RMB 16.8 billion, 22.6 billion and 29.5 billion from 2021 to 2023, and the attributable net profit of RMB 3.15 billion, 4.32 billion and 5.83 billion, with a year-on-year increase of 50%, 37% and 35%, EPS of RMB 1.20, RMB 1.65 and RMB 2.23 respectively, corresponding to 56 times, 40 times and 30 times of the current share price PE. As a leading industrial control enterprise, the company has strong ability to capture opportunities and growth performance beyond the industry level. The growth path is clear. The company is given 50-55 times PE in 2022, with a target range of 82.5-90.8 yuan, and maintains the “recommended” rating.
Risk tip: the price of raw materials has risen sharply, the development of new product lines is less than expected, and the company’s cost control is insufficient
