\u3000\u3 China Vanke Co.Ltd(000002) 947 Suzhou Hengmingda Electronic Technology Co.Ltd(002947) )
[matters]
On March 28, 2022, the company released the performance forecast for the first quarter of 2022. It is estimated that the net profit attributable to the parent company in 2022q1 is 30-40 million yuan, with a year-on-year increase of 69.5% – 126.0%, deducting 25-36 million yuan of non net profit, with a year-on-year increase of 94.4% – 180.0%.
[comments]
Customer recognition has been continuously improved and production capacity has been gradually released. With the further recognition of customers in the company’s technology, quality and service ability, as well as the gradual release of the company’s production capacity, the company’s revenue has achieved steady growth. Thanks to the continuous optimization of the company’s product structure, internal refined management and cost control, the management efficiency has been continuously improved and the overall profitability has been greatly improved. After the company achieved the revenue inflection point in the third quarter of 2021 and the profit inflection point in the fourth quarter of 2021, the company made efforts to overcome the external environmental pressure in the off-season of the first quarter of 2022 and achieved good performance.
In 2021, the company deeply participated in the R & D and design of customers’ new products, and was responsible for the three times increase in the number of proofs compared with 2020. Due to the long development cycle of new products for key customers, we believe that the proofing accumulation of the company in 2021 will be greatly released after the mass production of downstream products. With the continuous improvement of the proportion of new products and the continuous optimization of process capacity and operation efficiency, it is expected that the growth rate of the company’s revenue and the improvement of profitability will continue.
Deep cultivation of key customers + expansion of business areas, and continuous innovation of downstream end products. In recent years, the company has continuously expanded its strategic layout in new fields and new businesses such as communication, VR / Ar / MR, new energy vehicles and medical equipment, actively seized business opportunities, and is expected to become a growth point for the long-term release of the company’s performance.
[investment suggestions]
It is estimated that the company’s revenue from 2022 to 2024 will be 1.323, 1.767 and 2.242 billion yuan respectively, the net profit attributable to the parent company will be 243, 335 and 417 million yuan respectively, and the EPS will be 1.38, 1.90 and 2.37 yuan / share respectively, corresponding to 14, 10 and 8 times of the current PE respectively. With reference to the past PE median level of the company and comparable companies in the industry, it is given a price earnings ratio of 35 times in 2022, maintaining the target price of 48.6 yuan and maintaining the “buy” rating.
[risk tips]
New product introduction and new business expansion were not as expected
Weak demand in consumer electronics market
The tension in the upstream semiconductor supply chain has intensified
The production expansion progress is lower than expected
The sharp fluctuation of exchange rate has a certain impact on the company’s production and operation
