\u3000\u3 China Vanke Co.Ltd(000002) 938 Avary Holding (Shenzhen) Co.Limited(002938) )
Event: the company released the performance forecast for the first quarter of 2022 on April 6. The net profit attributable to the shareholders of the listed company was 579614 million yuan, an increase of 65% – 75% over the same period of the previous year; The net profit after deducting non recurring profit and loss was 573596 million yuan, an increase of 150% – 160% over the same period of last year. The basic earnings per share is 0.25-0.26 yuan / share.
Miniled products in large quantities, driving the growth of performance in the first quarter: in recent years, the company has continued to push through the old and bring forth the new. With “new materials, new products, new processes, new equipment and new technologies” as the main axis and “light, thin, short, high and low, exquisite and smart” as the R & D direction, the company has carried out R & D layout in advance in 5g across 6G, AI, IOT, cloud, big data, edge computing, sensing technology and other application scenarios. Following SLP, 5g and other products, the company successfully launched miniled backlight products in 2021. It is one of the few manufacturers in China who master miniled backlight circuit technology. According to the 2021 annual report, the company’s two production lines in Huai’an park have been successfully put into operation, and the production capacity is planned to be 93000 square meters / month. The products are mainly for brand customers in the field of mobile products such as tablet and laptop. The performance forecast disclosed that the company’s profit growth in the first quarter mainly came from miniled and MSAP products.
Continuous process improvement, product structure optimization, cost reduction and profit increase: the company has long focused on and deepened the research and development of PCB technology. The 2021 annual report disclosed that the minimum aperture of the company’s printed circuit board products can reach 0.025mm and the minimum line width can reach 0.025mm, which has formed the mass production capacity of the next generation PCB product SLP representing higher-level process requirements. The company further improves the profitability of the company by timely adjusting its business strategy and grasping the development opportunities of the industry. The 2021 annual report disclosed that the gross profit margin of the communication board business increased by 0.16 percentage points over the previous year, mainly due to the company’s optimization of product structure and increase in the proportion of high value-added products; In 2021, the sales revenue of consumer electronics and computer board products reached 11.076 billion yuan, a year-on-year increase of 43.57%; The sales revenue of boards for automobiles, servers and other products was 256 million, with a year-on-year increase of 74.12%.
Downstream demand rebounded and new production expansion boosted sustained growth: according to prismark statistics, the total output value of the global PCB industry in 2021 is estimated to reach US $80.449 billion, a year-on-year increase of 23.4%. Among them, as the largest producer of the global PCB industry, China accounted for 54.2% of the total output value of the global PCB industry in 2021. Prismark predicts that the global PCB market will continue to grow in the next five years, and 5g, artificial intelligence, Internet of things, industry 4.0, cloud servers, storage devices and automotive electronics will become a new direction to drive the growth of PCB demand. According to the 2021 annual report, the company has completed the capacity layout in many fields. In terms of soft board, the raised investment project Huai’an flexible multilayer printed circuit board expansion project has been invested, and the phase I investment plan of Taiwan Kaohsiung FPC project is also being continuously promoted; In terms of module assembly, the Indian park has been put into production in the second half of 2021, and the second phase of Shenzhen Second Park is also advancing as planned; In terms of hard board, the intelligent manufacturing project of high-end HDI and advanced SLP carrier board in Huai’an third park is under construction as planned.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be 37.637 billion yuan, 43.062 billion yuan and 49.764 billion yuan respectively, and the net profit attributable to the parent company will be 3.958 billion yuan, 4.519 billion yuan and 5.383 billion yuan respectively, maintaining the “Buy-A” investment rating.
Risk warning: the risk of continuous rise in the price of raw materials; The risk of production falling short of expectations due to the epidemic; Exchange rate change risk.
