Zhejiang Jiemei Electronic And Technology Co.Ltd(002859) (002859)
Event: on November 30, 2021, the company issued an announcement to launch the restricted stock incentive plan and the second phase of employee stock ownership plan; On December 1, 2021, the company issued an announcement and signed a strategic cooperation framework agreement with Samsung Electric Co., Ltd. The total number of restricted stock incentive objects is 50, and the grant price of restricted stock is 16.81 yuan / share (the latest closing price is 34.24 yuan). The number of participants in the second phase of employee stock ownership plan shall not exceed 300, the fund to be raised shall not exceed 70 million yuan, and the lock-in period is 12 months.
The assessment objectives are based on steady development, and the incentive plan is expected to enhance the driving force of new business development. The restricted stock incentive plan has three levels of assessment criteria: the company level growth target is an interval value, in which the target value is based on the average net profit of the three years from 2019 to 2021. The net profit growth rates from 2022 to 2024 are 98%, 157% and 234% respectively. The closer the actual growth is within the interval value, the higher the proportion of unlocking the upper limit; In addition, at the business team level, performance assessment objectives are also set in combination with the characteristics of each business team, future development planning and other business realities; Team and individual assessment objectives are the core, and the completion also affects the unlocking proportion. Among the incentive objects, Mr. Sun hemin, deputy general manager, received 400000 restricted shares, accounting for 11.93% of the total number of restricted shares to be granted. Mr. Sun hemin is the project leader of BOPET film and release film for release film of the company. The equity incentive is expected to fully mobilize the enthusiasm of relevant employees of the company and promote the long-term development of various businesses, especially the new business of release film.
The base film equipment has entered the trial production stage, and a strategic cooperation framework agreement has been signed with Samsung Electric Co., Ltd. to make a breakthrough in the release film business. The release film business company’s products now cover major Taiwan customers and mainland customers. We believe that the key to the breakthrough of medium and high-end release film lies in the self-production of base film and the expansion and volume of core customers. Base film: at present, the company’s release film base film production project is accelerating. Since November, the base film equipment has successively entered the single machine test, on-line test, material test and trial production period; Since September, CPP film project has realized batch supply of aluminum-plastic film customers, and received good feedback. Customers: the company has the inherent advantages of paper carrier, and it is expected to realize the rapid introduction of the client after the base film is put into operation; The company signed the strategic cooperation framework agreement (hereinafter referred to as the agreement) with its core customer Samsung electric ）, the two sides will cooperate extensively in technology, R & D, products, services, information exchange, etc. Meanwhile, Samsung Electric will try its best to give priority to the company’s products and service guarantee under the same conditions, including but not limited to paper carrier tape, upper and lower tape, plastic carrier tape and release film. We believe that the agreement will inject propellant into the development of relevant businesses of the company, Among them, the development of new businesses such as release film may benefit greatly, and the revenue and gross profit margin will rise to a higher level.
The downstream production expansion trend remains unchanged, and the capacity expansion of paper carrier belt is strengthened. The company’s base paper and molds are self-produced, with cost advantages and deep binding with customers. The global share of paper tape exceeds 50%. In terms of production capacity, in order to meet the needs of downstream customers, the company plans to upgrade the base paper expansion project: first, 20000 t / a production line of phase I of the original raised investment project (completed in 2017) will carry out technical transformation and add back-end deep processing equipment. It is expected that the capacity after transformation will be increased to 28800 T / A; secondly, a new high-end electronic base paper production line will be built in phase II of the project, which is expected to be put into operation in August 2022; it is expected that after the completion of the company’s new capacity and technical transformation project, the total capacity will reach 120000 T / A, which will further expand the company’s paper carrier Scale advantages in the field and enhance comprehensive competitiveness; At the same time, the expansion of belt production has also been promoted simultaneously, and the supporting capacity has been continuously enhanced.
Plastic carrier tape is supplied to semiconductor sealing and testing customers, and the business has a good momentum of development. The high-end shipments of plastic carrier belts increased steadily, and the gross profit margin of products remained stable. The self-sufficiency rate of raw materials will gradually increase; Customers in the field of semiconductor packaging and testing enter the supply stage. Subsequently, with the further expansion of production capacity and the continuous development of new customers, the scale and profitability of plastic carriers will continue to rise.
Profit forecast and investment suggestions: Zhejiang Jiemei Electronic And Technology Co.Ltd(002859) is a global leading supplier of paper tape, benefiting from the continued boom in downstream passive component demand and customer expansion, the company’s production and sales are booming, and the gradual implementation of new production capacity contributes to steady growth; Release film, plastic carrier technology breakthrough and smooth customer development are expected to rebuild a new growth level. We expect Zhejiang Jiemei Electronic And Technology Co.Ltd(002859) to achieve revenue of RMB 2.014/2649/3698 billion in 2021-2023 and net profit attributable to parent company of RMB 422 / 527 / 717 million in 2021-2023. At present, the corresponding PE in 2021-2023 is 33.3x/26.6x/19.6x respectively, maintaining the “buy” rating.
Risk warning: downstream demand is less than expected
