\u3000\u3 Shengda Resources Co.Ltd(000603) 380 Suzhou Etron Technologies Co.Ltd(603380) )
Core view
In 2021, the net profit attributable to the parent company increased by 37.33% year-on-year to RMB 227 million, and the revenue of 4q21 reached a new high in a single quarter. The company issued a performance express. In 21 years, the company achieved a revenue of 1.752 billion yuan (YoY: 35.88%), a net profit attributable to the parent company of 227 million yuan (YoY: 37.33%), and a net profit attributable to the parent company of 210 million yuan (YoY: 45.43%); The corresponding 4q21 revenue was 539 million yuan (YoY: 52.1%, QoQ: 19.2%), and the net profit attributable to the parent company was 57.42 million yuan (YoY: 22.5%, QoQ: - 7.4%), of which 4q21 revenue hit a record high in a single quarter. The high growth of the company's performance benefits from: 1) deep excavation of existing customers and development of incremental customers; 2) The company's production expansion projects have been put into operation; 3) Under the background of "shortage and price increase" of electronic materials, the company cooperates with customers to adjust order requirements, formulate material preparation strategies, and actively promote the certification of alternative materials, so as to reduce costs and increase efficiency and ensure stable profitability. The company's production expansion projects have been put into operation, and its order undertaking capacity has been further enhanced. In terms of production capacity, the company's "high-end electronic manufacturing expansion projects" were put into operation successively in 2021, and all of them were put into operation at the end of the year. The company's production capacity and order undertaking capacity were improved. In addition, according to the announcement, the first phase of the company's phase II plant has a total area of 53000 square meters, which is expected to be put into use in the first half of 2022. The company has previously changed the overall plant and logistics planning, and built an intelligent logistics system according to the German industry 4.0 standard, aiming to further improve the internal logistics efficiency and reduce the manufacturing cost; At the same time, the capital construction of the second phase of the company's phase II plant (about 120000 square meters) is also under planning and design. According to the announcement, after the company's phase II plant (about 170000 square meters) is put into use, the corresponding output value of the company's phase I + phase II plant is expected to reach 10 billion yuan.
The advantages of the company's differentiated strategic positioning are prominent, and intelligent manufacturing supports the steady growth of the company. The company's business is oriented to automotive, industrial control, medical electronics and other fields. With the market expansion driven by China's consumption upgrading, the above-mentioned niche market with relatively high-end 3C supply chain in China has accelerated localization, creating a good development foundation for the company's differentiated strategic positioning. In the past 21 years, the company had more than 270 customers (58 new customers year-on-year), producing more than 5000 kinds of products and 60000 kinds of raw materials; The company's independently developed supply chain management system helps the company achieve accurate control of the whole process. At the same time, the intelligent manufacturing phase II plant built according to German industry 4.0 standard will help the company achieve the goal of 50-70 new customers every year.
Investment suggestion: the target price is 37.58-39.46 yuan, maintaining the "buy" rating.
With the trend of "electronics +" gradually expanding the downstream space of the electronic industry, and the relatively high-end niche markets such as automobile, industrial control and medical equipment begin to accelerate localization, we are optimistic that the company will emerge as a new force in the EMS industry through the differentiation strategy of high-quality customers and high-quality orders. We expect the net profit attributable to the parent company to be RMB 303 million and RMB 389 million in 2022 and 2023, corresponding to 17.0 and 13.2 times of PE respectively. Referring to the PE valuation of 19.88 times of the consistent expected average value of wind, a comparable company in 2022, we give the company 20-21 times of the expected PE in 2022, with the corresponding target price of 37.58-39.46 yuan, maintaining the "buy" rating.
Risk warning: the demand is less than expected; Capacity release is less than expected; Customer development is not as good as expected.
