\u3000\u3 China Vanke Co.Ltd(000002) 384 Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) )
Core view
Complete the organizational structure adjustment and business sorting, and comprehensively improve the quality and efficiency from 2021. The company was founded in 1980. In 2020, the new management proposed the structure of "one headquarters platform, three business segments and five business divisions", which broke the dilemma of low efficiency of dozens of subsidiaries and achieved cost reduction and efficiency increase. The company's net interest rate increased from 1.7% in 2016 to 5.4% in 20 years, and the asset liability ratio decreased from 81.9% in 16 years to 64.9% in 20 years. PCB is the core business of the company, accounting for 67% of the revenue in 20 years. In addition, the revenue of touch panel, LCM, led and precision components accounted for 15%, 8% and 11% respectively.
PCB hard board business seizes the market opportunity of automobile electrification and server upgrading. The MCU, VCU and BMS of the electric control system form the main increment of PCB, and the value of a single vehicle has increased by more than 2000 yuan; In addition, the penetration rate of adpcb sensor increases significantly. In terms of cloud computing, with the support of pcie5 With the launch of 0 processor, the server PCB market is expected to usher in the development opportunity of upgrading and rising volume and price. The company acquired multek in 2018 and entered the hard board market. After integration, multek's net profit margin increased from 0.11% in 15 years to 5.05% in 20 years. The company's hard board customers include Huawei, oppo, Ford (automobile), Amazon (server), etc., and are entering the PCB supply chain of bat server. With the support of continuous fine management, the automobile and server business is expected to expand rapidly.
FPC soft board business focuses on the increase of Apple's share, and actively expands new customers of smart wear and automobile. In 2016, the company acquired mflx and cut into Apple's FPC soft board supply chain. After integration, the net profit margin of mlfx increased from 1.09% in 15 years to 9.36% in 18 years; The revenue increased from 4.1 billion yuan in 15 years to 15.5 billion yuan in 20 years, and ranked among the top three FPC enterprises in the world in 20 years. For FPC business, we are optimistic about: 1) with the gradual decline of FPC production capacity in Japan, the company is expected to expand its category and share in Apple's industrial chain; 2) Android phones are developing towards high-end and lightweight, and the demand for FPC is increasing; 3) The company develops new customers such as smart wear and automobile to support FPC's long-term growth space.
The active layout of mini led, pad and TV products has been promoted smoothly, which is expected to become a new business growth point. In the field of LED devices, the company is a global leader in the small spacing LED packaging market, and actively layout Mini led. By the end of 2020, the company has designed, developed and launched a variety of mini LED products (including direct display and backlight). At present, the company's Mini LED products applied to pad have been in small batch trial production. With major global manufacturers launching Mini LED products in 2021, the company's led business is expected to usher in rapid growth.
Investment suggestion: the target price is 25.72-27.15 yuan, maintaining the "buy" rating. We expect the company's revenue to increase by 11.3% / 12.7% / 12.6% year-on-year to RMB 313 / 352 / 39.7 billion, and the net profit attributable to the parent company to increase by 24.7% / 28.0% / 24.9% year-on-year to RMB 1908 / 24.44/3.051 billion. Referring to the PE valuation of 19.0 times of the consistent expected average of wind, a comparable company in 2022, we give the company 18-19 times of the expected PE in 2022, corresponding to the target price of 25.72-27.15 yuan, and maintain the "buy" rating.
Risk warning: new business development is not as expected; High dependence on Apple customers; International trade risks.
