\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 79 Electric Connector Technology Co.Ltd(300679) )
Event: on February 14, 2022, the company issued a report on share repurchase. This repurchase plans to repurchase 100200 million yuan for equity incentive or employee stock ownership plan. On February 22, 2022, the company issued a project investment announcement, in which Dongguan Feite, which is invested by CCG Guanglian and established jointly by the company and CCG assets, acquired ftdi80, a leading enterprise in the field of USB bridging chips in the world 2% equity.
Comments: the company has been deeply engaged in the field of RF connectors. Relying on years of continuous R & D investment and process accumulation, while taking root in the field of mobile terminals, the company has penetrated and developed into the fields of automobiles, wearable products, Internet of things and so on. The company’s internal core backbone employees are encouraged in place, and the internal extension layout will promote healthy, stable and long-term development.
In recent years, the company has completed a number of capital operations, and has invested in Lingsheng Technology (cellular communication and Internet of things SOC, etc.), Nanjing maisike Microelectronics (millimeter wave chip), acquired Henghe Dingfu (FPC, LCP), pogopin connector and other subdivided companies, so as to further strengthen the horizontal and vertical layout of the company’s business and realize synergy.
Invest in the world’s leading USB bridge chip company in the field of connectors. (1) Ftdi “bridging technology” has strong compatibility. It is suitable for free USB drivers of operating systems such as Microsoft Windows, applemacosx, Linux and Android. The products are applied to many fields such as consumer electronics, communication, automotive electronics and industrial control. It has a high degree of coincidence with the downstream of the company’s main business connector, and promotes the endogenous extension of the company’s business under the synergistic effect, Expand customer and business scale. (2) At present, ftdi ranks among the top in the market share of bridging chip in the world. With more than 25 years of experience in bridging chip industry, ftdi has profound technology accumulation and strong R & D ability to help the company’s technology iteration and upgrading. (3) Ftdi products are key devices. Customers usually customize them stably for a long time, and the threshold for competitors to replace them is high.
Repurchase is used for equity incentive to enhance internal and external confidence. The company’s repurchase will be used for equity incentive or employee stock ownership plan, which will help to increase internal recognition and enthusiasm, and enhance the confidence of external investors. Combined with the company’s previous equity incentive draft, the company will carry out a large-scale incentive plan for senior executives and middle-level personnel. At present, the company’s automobile connector business has achieved rapid development, and the stability of personnel will be conducive to the company’s continuous and stable expansion of business, consolidate the company’s competitive barriers and avoid external competition caused by brain drain.
Investment suggestion: the company actively invests in the upstream chip field and carries out industrial development layout, which is expected to promote the company’s main business to more downstream development and help the company expand its head customers at home and abroad. The company establishes equity incentive plan to enhance internal recognition and external confidence. The profit forecast for 2021 was lowered. Due to the impact of the epidemic, the demand for consumer electronics in 2021 was affected to a certain extent. At the same time, due to the rapid promotion of the company’s automobile high-speed connector business, the company raised its revenue and profit expectation in 2023. The company’s profit forecast adjusted the net profit attributable to the parent company from 409 / 551 / 732 million yuan to 381 / 551 / 753 million yuan from 2021 to 2023, maintaining the “buy” rating.
Risk tip: the downstream mobile phone industry is less prosperous than expected, the acquisition progress is less than expected, the automatic driving progress is less than expected, the volume of automobile customers is less than expected, the acquisition target company cannot achieve the expected income, and the repurchase plan cannot be implemented smoothly
