\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 183 Shengyi Technology Co.Ltd(600183) )
Leading manufacturers lead the industry, open a new era of “materials determine products” and maintain the “buy” rating
The company released its annual report for 2021. In 2021, the company achieved a total operating revenue of 20.27 billion yuan, yoy + 38.0%, and a net profit attributable to the parent company of 2.83 billion yuan, yoy + 68.4%. Throughout the year, the company successfully transferred the cost of upstream raw materials and achieved an increase in the gross profit of single copper clad laminate, with the sales unit price increasing by 33.8% and the gross profit increasing by 69.4%. Considering the recent price reduction of traditional products, we lowered the profit forecast for 20222023 and added the profit forecast for 2024. It is expected that the net profit attributable to the parent company will reach RMB 2.96/32.8 (the previous value is 32.9 / 37.7) / 3.67 billion, yoy + 4.5% / 11.1% / 11.7%, EPS is 1.28/1.42 (the previous value is 1.42 / 1.63) / 1.59, and the current share price corresponds to 12.6/11.3/10.2 times of PE. Considering that the company has opened a new era of “materials determine products”, the large volume of high-end products has driven the company to get rid of the periodic disturbance of traditional products and maintain the “buy” rating.
The company’s new five-year plan is advancing steadily and is expected to demonstrate its business resilience
The actual capacity expansion range of the company may exceed the minimum guidance of the new round of five-year plan. After the completion of Shaanxi Shengyi phase III, Songshanhu phase VIII, Changshu phase II and Jiangxi phase II projects, the total expanded capacity of the project will increase by 39.7 million square meters / year on the basis of 2021. The company proposed the layout plan of the second manufacturing base in Dawan District, laying the foundation for serving PCB manufacturers in the downstream Pearl River Delta. The company plans to operate 109.81 million square meters of hard board copper clad laminate and 14.42 million square meters of flexible board in 2022, with a total year-on-year increase of 8.6%. Considering that the operating budget values disclosed by the company in the calendar years from 2013 to 2021 have been overfulfilled except 2015, demonstrating keen industry judgment and solid plan execution, we believe that the company is expected to reflect its business resilience in the period of falling prices of traditional products.
A new era of “materials determine products” has opened, and high-end materials have ushered in a domestic alternative window
The company continues to invest in R & D and layout the whole category of copper clad laminate materials. In 2021, the company’s R & D expenses reached 960 million yuan, yoy + 35.6%, accounting for 4.8% of the operating revenue. The R & D investment includes multiple product application layouts of automotive millimeter wave radar, 112gbps related high-speed materials and packaging substrate materials. It is expected to usher in a good window of domestic substitution. The continuous improvement of the proportion of high-end products will smooth the fluctuation of performance and cushion the weakening of profits of traditional products. The company has changed from the role of industry catcher to industry leader, opening a new era of “materials determine products”.
Risk tips: weak downstream demand, rising raw material prices, less than expected production projects and less than expected introduction of new products
