Xiamen Faratronic Co.Ltd(600563) (600563)
The company is the world’s leading enterprise in the first echelon of thin film capacitors, with decades of development history of thin film capacitors and a professional senior management technical team. It has achieved rapid growth for several years under the promotion of policies such as home appliances to the countryside. Now, the rapid expansion of markets such as photovoltaic and new energy vehicles has once again brought a historical opportunity for rapid development to the company. The company is expected to achieve better market performance in international and Chinese competition by virtue of its localization leading advantages.
Key investment points:
Technical background: the company has been working on thin-film capacitors for decades with profound technical accumulation. In 1967, the company began to manufacture thin film capacitors and was listed on the Shanghai Stock Exchange in 2002. The company’s senior management team has excellent professional background and rich industry experience. The management of the company has been engaged in the production and manufacturing management in the field of thin film capacitors since the production line, with decades of service. The whole team has worked steadily with the company in the field of thin film capacitors for many years, laying a solid foundation for efficiently leading the track leading company to continue to develop towards specialization and innovation.
Business Overview: Generally speaking, the financial indicators of Xiamen Faratronic Co.Ltd(600563) mainly engaged in thin film capacitors have improved significantly in recent years, and the production and marketing level tends to be strong. The company’s 21q3 revenue increased by 51.23% over the same period of last year, reaching 2.021 billion yuan; Net profit after deduction of non return to parent increased by 51.83% to 524 million yuan; The gross profit margin remained at the level of about 42%, and the net profit margin decreased slightly to 27.68%; The rate of return on capital achieved a trend increase, reaching 17.59%. The production and sales volume of the company has also increased against the trend in 2020, reaching 2.75 billion and 2.688 billion respectively.
Product market: driven by the national development strategy of “carbon neutralization”, the period of large-scale production of new energy terminals has come, which has brought sufficient power to the sales growth of relevant supporting devices. High reliability, long service life, self-healing and other properties make thin film capacitors the first choice for capacitor devices required for photovoltaic power generation and new energy vehicles. After the smooth filtering of the thin film capacitor, the current output to the later stage of the circuit is more stable, which plays an important role in ensuring the stability and performance of the equipment. In recent years, the overall prosperity of traditional household appliances and other fields has increased slowly, which has also changed the core driving force of downstream demand for thin film capacitors.
Competitive environment: the company has strong advantages in international and Chinese market competition. Compared with international manufacturers, the company’s high main focus in the field of thin film capacitors and the localization advantages of the Chinese market make it have relatively higher growth potential. Compared with Chinese manufacturers, many financial indicators of the company show a more robust development trend, and its business scale and industry status accumulation have formed a strong customer certification advantage in important business lines.
Profit forecast and investment suggestions: from 2021 to 2023, the company is expected to achieve revenue of RMB 2.801 billion, RMB 3.914 billion and RMB 5.165 billion respectively, net profit attributable to the parent company of RMB 773 million, RMB 1.027 billion and RMB 1.316 billion, and EPS of RMB 343 million, RMB 4.56 million and RMB 5.85 per share respectively. In the future, driven by the market and its own advantages, the company has high certainty in expanding its business scale, and is rated as “overweight” for the first time.
Risk factors: valuation premium, rising geopolitical and military expectations and the risk of epidemic recurrence.
