\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 52 Sihui Fuji Electronics Technology Co.Ltd(300852) )
Event: in 2021, the company achieved an operating revenue of 1.05 billion yuan, a year-on-year increase of 61.44%; The net profit attributable to the parent company was 184 million yuan, a year-on-year increase of 52.94%; The non net profit attributable to the parent company was 172 million yuan, a year-on-year increase of 53.09%.
Overcome multiple difficulties and consolidate growth momentum. The company’s short-term profit growth in the first half of 2021 was greatly affected by the increase in the price of raw PCB and cladding materials. Of course, the company’s short-term profit growth was greatly affected by the increase in the price of raw PCB and cladding materials in the first half of 2021, Compared with 2020, the gross profit margin decreased by 4.27pct. At the same time, the depreciation and amortization of plant, equipment and other assets and related expenses involved in the company’s fund-raising projects began in the fourth quarter of last year, which also temporarily dragged down the company’s profitability when the new production capacity was not full. Considering the rewards to employees for exceeding the target performance, the company’s performance growth in 2021 was quite solid. On the whole, in terms of capacity expansion, the increase of the supply share of original core customers, the introduction of new important customers, and the preparation of PCBA factory, the company has moved forward step by step to continuously consolidate the growth momentum in the future.
Focus on industrial control and automobile, and constantly develop important local customers. During the reporting period, the company continued to focus on the industrial control and automobile markets, which contributed 60% and 20% of the revenue respectively. Especially in the aspect of automobile, the company has previously entered the supply of traditional automobile enterprises such as Toyota, Honda and Nissan through global well-known automobile electronic EMS manufacturers such as Hicks and Jiyan Xinyang, and its production technology and product quality have been recognized by customers. On the one hand, the company strengthened cooperation with original customers to help Japanese EMS manufacturers develop the Chinese Shanxi Guoxin Energy Corporation Limited(600617) automobile market, such as forming a strategic cooperative relationship with CMK, On the other hand, the company actively and independently explored local important main engine plants and parts customers, successfully introduced new forces of vehicle manufacturing and some traditional main engine plants, and obtained orders from China’s top 3 lidar suppliers. The raised investment project put into operation in September is mainly used to meet the order demand of large quantities of automotive products. Due to the lack of core in 2021 and the first quarter of 2022, The demand of the automotive electronics industry chain is lagging behind. It is expected that as the chip supply tends to be normal, the trend of automotive electrification, intelligence and networking will drive the clear expansion of the vehicle PCB market and provide a better digestion channel for the company’s new production capacity.
Orderly expansion of production capacity and power electronic assembly. With the launch of the raised investment project, the company’s monthly output has increased from 80000 square meters at the beginning of 2021 to more than 100000 square meters at the end of 2021, and the production capacity is still gradually released. In addition, the plant where the company’s raised investment project is located still has surplus space. After obtaining the government’s EIA indicators, it will further expand the production capacity and have the ability to quickly put into operation and climb under the condition of demand guarantee. At the same time of capacity expansion, in order to meet the demands of industrial control customers with multiple varieties and small batch, the company actively cuts into the field of downstream electronic assembly (PCBA), and the phase V plant focusing on the small batch circuit board mounting business is expected to complete the single line trial production in March 2022. At that time, the company will be able to provide customers with the whole process services of sample design, production and chip mounting, enhance customer stickiness and the synergy of PCB and component mounting business, It is expected to further increase the income and performance elasticity of the company.
Profit forecast and investment rating: maintain the buy rating. The company’s overall production capacity will be greatly improved in the next 2-3 years. The strong demand of Japan industrial control and China Shanxi Guoxin Energy Corporation Limited(600617) automobile market is expected to be the guarantee for the digestion of the company’s new production capacity. At the same time, the start and growth of component mounting business is expected to bring new incremental elasticity to the company’s performance. It is expected that the company’s net profits from 2022 to 2024 will be 264 million, 336 million and 425 million respectively, The current share price corresponding to PE is 15.72, 12.88 and 9.78 times respectively, maintaining the buy rating.
Risk tips: (1) the company’s orders are caused by the decline in the bearing of industrial control and automobile scenes; (2) The industry competition caused by the expansion of PCB production capacity in China is intensified; (3) The ramp up progress of the company’s production capacity was less than expected.
