\u3000\u3 China Vanke Co.Ltd(000002) 916 Shennan Circuits Co.Ltd(002916) )
Events
① the company achieved a revenue of 13.943 billion yuan in 2021, an increase of 20.19% year-on-year; The net profit attributable to the parent company was 1.481 billion yuan, a year-on-year increase of 3.53%; The net profit attributable to the parent company after deduction was 1.272 billion yuan, a year-on-year decrease of 1.73%. ② In Q4 of 2021, the company realized a revenue of 4.187 billion yuan, an increase of 59.93% year-on-year; The net profit attributable to the parent company was 454 million yuan, a year-on-year increase of 36.75%; The net profit attributable to the parent company after deducting non-profit was 343 million yuan, with a year-on-year increase of 17.87%.
The company’s performance is in line with market expectations
In 2021, the company showed the overall characteristics of increasing income without increasing profit, weak in the first half and strong in the second half. The main reasons are: the impact of the epidemic on the supply side still exists, the supply chain circulation of the industrial chain is not smooth, and the supply shortage and price rise of bulk commodities, raw materials, chips and various electronic components have formed a certain cost pressure on the company, As a result, the annual gross profit margin decreased by 2.76pct year-on-year. In the first half of the year, due to the slowdown in the construction progress of 5g base station, the PCB business declined to a certain extent; In the second half of the year, the company actively promoted the diversification of downstream markets, and the results showed that the data center and automobile business continued to make efforts. In addition, the packaging substrate business performed well throughout the year, and the company will continue to increase its layout. In Q4, the revenue increased month on month in a single quarter. As the product structure of PCB and other businesses was worse than that in the third quarter, the gross profit margin decreased month on month.
From the perspective of “3-in-one” business layout:
① PCB business: the revenue was 8.737 billion yuan, with a year-on-year increase of 5.13%, accounting for 62.66% of the company’s total operating revenue, and the gross profit margin was 25.82%, with a year-on-year decrease of 3.14 PCTs. From the downstream point of view, the demand of the communication market has been adjusted, but the data center, automotive electronics and other markets have made great breakthroughs. The company’s orders in the field of PCB business data center increased by 45% year-on-year, the switching and upgrading of the new generation server platform was promoted in an orderly manner, the value of related products was higher, and the proportion of demand increased steadily; Nantong phase II production capacity climbed smoothly, providing capacity space for the subsequent development of data center business. The company made significant progress in the development of automobile electronic orders, with a year-on-year increase of 150%; The construction of the company’s automotive electronics factory (Nantong phase III project) has been progressing smoothly and has been put into operation in Q4 in 2021.
② IC carrier business: the revenue was 2.415 billion yuan, a year-on-year increase of 56.35%, accounting for 17.32% of the company’s total operating revenue; The gross profit margin was 29.09%, with a year-on-year increase of 1.04%. During the reporting period, the global semiconductor boom continued to be high, and the company’s packaging substrate business achieved rapid growth; It is noteworthy that due to the small proportion of raw material costs in the carrier business and the continuous improvement of marginal costs caused by scale effect, the gross profit margin of the carrier business of the company increased by 2.17pcts in the second half of the year on the basis of a 20% MoM increase in revenue. The company’s storage packaging substrate has made significant breakthroughs in technical capacity, customer development and capacity release. The annual orders of storage products have increased by 140% year-on-year. Wuxi substrate factory has climbed smoothly and has entered a stable stage of mass production.
③ PCBA business: the revenue was 1.94 billion yuan, with a year-on-year increase of 67.22%, accounting for 13.91% of the company’s total operating revenue, and the gross profit margin was 12.56%, with a year-on-year decrease of 2.05 PCTs. PCBA business involves a wide range of procurement in the supply chain. Due to the global supply shortage of electronic components such as chips and the obstruction of international logistics under the covid-19 epidemic, the supply chain has been affected in terms of cost and delivery timeliness, and the profit pressure is obvious. The company will improve its supply chain management ability by signing forward procurement contracts and strengthening spot procurement to ensure stable supply in the future market.
Investment advice
We believe that the top technical strength in the industry is the foundation of the company, and the strong self-regulation ability is the guarantee of the company’s continuous growth in recent 40 years. The company is a PCB company that deeply cultivates the data center, automobile PCB and IC board loading golden track at the same time. Its board loading business has also shown good profitability and obvious scarcity. The company’s R & D personnel increased by 21% in the whole year, and the leading advantages of track technology above are expected to be further expanded in the future. We suggest investors pay attention to the investment opportunities brought by the expansion of carrier board and the increase in the proportion of automobile server business. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.822 billion, 2.2222 billion and 2.616 billion, with corresponding P / E ratios of 25.33, 20.82 and 17.69 times, maintaining the “buy” rating.
Risk tips
Upstream raw material prices continued to rise, and downstream demand was lower than expected.
