Wenzhou Yihua Connector Co.Ltd(002897) (002897)
Key investment points
It is proposed to expand photovoltaic support business by no more than 1.077 billion
The company announced that it plans to raise no more than 1.077 billion for the construction project of Tianjin photovoltaic support core component production base (with a total investment of 452 million), Yueqing photovoltaic support core component production base (with a total investment of 332 million), photovoltaic support full scene application R & D and experimental base construction project (with a total investment of 69 million) and supplement working capital (300 million). Among them, Tianjin production base project (construction period: 2 years) will improve the production capacity of TTU pipeline and purlin, which belongs to the capacity expansion of existing products; Yueqing production base project (with a construction period of 2 years) on the one hand is to expand the production capacity of the company’s existing products such as stamping parts rail and Siasun Robot&Automation Co.Ltd(300024) welding parts BHA. At the same time, it will also realize the mass production of photovoltaic tracking support controller, enrich product structure and enhance competitiveness; The supplementary working capital project will effectively alleviate the capital pressure of the company, promote the expansion of business scale, and help the steady operation. At present, the company’s photovoltaic support business is in a high-speed development channel. The fixed increase will effectively expand the production capacity of photovoltaic support business, further enhance competitiveness, and is expected to significantly thicken future performance. At present, the company is an important supplier of NT (the largest share of photovoltaic supports in the world). The volume of GCS and FTC is rapid, and has actively developed new customers such as Soltec and PVH. The expectation of overseas revenue in the future is optimistic; The acquisition of Tianjin Shengwei fali China machine market has received 50 MW orders and delivered them successively. The development expectation of photovoltaic industry under China’s dual carbon trend is optimistic and is expected to open a new incremental market for the company.
Photovoltaic bracket, automobile connector and two wheel drive will increase in the future
Photovoltaic support business is the main growth driving point of the company. In May 2021, the company has completed the price negotiation with customers, which not only reflects the company’s competitive strength, but also ensures the profit margin of subsequent photovoltaic support business. The electrification / intellectualization of vehicles has opened up huge space for high-voltage and high-speed connectors. Suzhou Yuanye, a subsidiary of the company, has customized and developed ADAS, MDC, 5gt-box and other series of connectors for Huawei. Customers include Huawei, APTIV, Byd Company Limited(002594) , Geely, etc. in 2021h1, the revenue increased by 110% year-on-year and is expected to enter a rapid growth channel.
Profit forecast and valuation
It is estimated that the revenue of the company will increase by 33%, 22% and 23% from 2021 to 2023, and the net profit attributable to the parent company will increase by 2%, 72% and 34%; PE is 43 times, 25 times and 18 times, maintaining the “buy” rating.
Risk warning: the impact of raw material price fluctuation exceeds expectations; The repeated epidemic situation has a greater impact on the company’s business than expected; The impact of overseas trade policies on photovoltaic support business exceeded expectations.
