\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 563 Xiamen Faratronic Co.Ltd(600563) )
The iteration of thin film capacitor technology slows down, the performance index of Chinese products is close to that of overseas products and has cost advantages, and the domestic substitution trend is obvious. Compared with overseas enterprises, Farah’s capital expenditure has been relatively radical in the past two years. The industry structure is stable and the growth attribute of the superimposed company is enhanced. The company may enter a period of accelerated growth. Move from traditional fields to new energy and expand market space
Thin film capacitors have strong industry scalability, extending from household appliances and lighting in traditional fields to electric vehicles and photovoltaic wind power. In 2019, the global capacitor market was about US $20.3 billion, and thin film capacitors accounted for 7%.
New energy vehicles: it is estimated that the market space in 22 and 25 years will be 3.58 billion yuan and 9.05 billion yuan respectively, with a CAGR of 36%.
Photovoltaic: it is estimated that the market space in 22 and 25 years will be 1.39 billion yuan and 2.39 billion yuan respectively, with CAGR of 23%;
Wind power: it is estimated that the market space in 22 and 25 years will be 330 million yuan and 500 million yuan respectively, with CAGR of 15%;
Energy storage: it is estimated that the market space will be 230 million yuan and 1.13 billion yuan in 22 and 25 years, with an annual CAGR of 71%.
Changes in the competition pattern: both the demand side and the production side turned to China, and the domestic substitution was at the right time
In the early stage, the demand side of thin-film capacitors was mainly in Europe, America, Japan and South Korea, and overseas enterprises had the first mover advantage. With the development of China’s home appliances, industrial control, electric vehicles, photovoltaic and other fields, the production end of thin film capacitors has also been transferred to China. From the perspective of product parameters, we think Farah is close to foreign brands. However, from the perspective of profitability, Farah’s gross profit margin and net profit margin are higher than those of similar overseas enterprises. Chinese enterprises have significant manufacturing advantages,
Cost control and ability to cooperate with downstream are better than overseas.
From the perspective of capital expenditure, Farah has expanded its production significantly faster than overseas enterprises in recent years. In 2020, Farah paid 132 million yuan in cash for the purchase and construction of fixed assets, intangible assets and other long-term assets, with a year-on-year increase of 50%. In 2021, q1-3 increased to 233 million yuan, with a year-on-year increase of 235%.
Have a deep understanding of the process, and the automatic production line + integrated layout brings cost advantages
Farah focuses on thin-film capacitor products. For Panasonic and TDK, capacitors are small businesses in large groups. Solid state capacitors account for the largest proportion in Jimei’s revenue structure, and Nichicon also includes various capacitor products. Farah attaches importance to automatic production and has introduced foreign advanced technology and equipment since 1983. The process flow of thin film capacitor is complex, and farad arranges metal film upstream. The evaporation electrode has the function of self-healing and higher safety. Farah makes its own evaporation link and layout to the upstream link to reduce the cost. Compared with other competitors, Farah pays more attention to the layout of new energy, with new energy revenue accounting for 48% in 2020. Taking TDK as an example, the downstream industry distribution of Q3 passive components in fiscal year 2022: automobile, communication, industrial equipment and others accounted for 40.7%, 16.5%, 29.8% and 12.9% respectively.
Profit forecast and valuation
It is estimated that Farah’s revenue from 2021 to 2023 will be 2.84 billion yuan, 3.83 billion yuan and 5.06 billion yuan, an increase of 50%, 35% and 32% at the same time; The net profit attributable to the parent company was 830 million yuan, 1.11 billion yuan and 1.43 billion yuan, with an increase of 49%, 33% and 30% respectively.
The proportion of the company’s new energy revenue is expected to increase from 48% in 2020 to 74% in 2023. Considering the company’s performance growth and historical valuation, PE 40x is given in 2023, with a corresponding market value of 57.2 billion and a target price of 254 yuan / share. “Buy” rating is given for the first time.
Risk tip: the sales volume of new energy vehicles is lower than expected, the development of customers is not smooth, the industry competition is intensified, the shortage of raw materials, and the calculation is subjective for reference only
