\u3000\u3 Guocheng Mining Co.Ltd(000688) 700 Kunshan Dongwei Technology Co.Ltd(688700) )
The company released its annual report for 2021, and achieved an operating revenue of 805 million yuan, a year-on-year increase of 45.11%; The net profit attributable to the parent company was 161 million yuan, a year-on-year increase of 83.21%; Deducting the net profit not attributable to the parent company was 149 million yuan, with a year-on-year increase of 89.23%.
Key points supporting rating
The traditional main business has grown rapidly and new businesses have made breakthroughs. In 2021, the company achieved an operating revenue of 805 million yuan, with a year-on-year increase of 45.11%, and achieved a significant increase, mainly due to the rebound in the prosperity of the PCB industry in 2021, the increased investment in the new construction and expansion of PCB enterprises, the company seized the market opportunity and continuously strengthened the research and development of new products and market development. The sales volume of the company’s traditional main business vertical continuous electroplating equipment increased rapidly, and the annual revenue was 655 million yuan, with a year-on-year increase of 38.83, accounting for 81.44% of the total revenue, Contribute to the main driving force of growth. In addition, the special equipment for negative electrode materials of new energy power batteries was disclosed separately for the first time. The annual sales volume in 2021 was 5 and 1 respectively, with a revenue of 9.6566 million yuan.
Profitability continues to improve, with sufficient orders on hand to support future performance growth. In 2021, the company’s comprehensive gross profit margin was 42.63%, a year-on-year increase of 1.93 PCT, of which the gross profit margin of vertical continuous electroplating equipment, which contributed the main revenue, was 45.40%, a year-on-year increase of 4.37 PCT, showing the leading position and bargaining power of the company. With the gradual expansion of the company’s scale, the scale advantage gradually appears. The cost rate during 2021 is 20.67%, a year-on-year decrease of 1.57 PCT. With the increase of gross profit margin and the decrease of expense rate, the net profit margin of the company in 2021 was 19.99%, an increase of 4.15pct year-on-year, a record high. In addition, by the end of 2021, the company’s contract liabilities were 215 million yuan, an increase of 34.54% year-on-year, indicating that the company has sufficient orders on hand, providing strong support for the company’s future performance growth.
The night before the demand for PET composite copper foil broke out, Dongwei pet copper plating equipment had an obvious first mover advantage. Contemporary Amperex Technology Co.Limited(300750) the leading manufacturer of power battery released a new multi-functional composite fluid collector technology at the 2021 world new energy vehicle conference. Compared with the traditional fluid collector, PET composite aluminum foil and copper foil have the advantages of high safety, high specific capacity, long service life and strong compatibility. They can completely solve the industry problem of heating out of control caused by internal short circuit, and effectively improve the battery capacity. They have broad application prospects in the future. At present, according to the Kunshan Dongwei Technology Co.Ltd(688700) annual report, the rolled horizontal sectord copper wire and the conductive ultra-thin rolled horizontal coated wire of bilateral fixture have met the requirements and technical conditions of mass production, and have obvious first mover advantages. In the future, with the gradual increase of the penetration rate of PET composite copper foil in power and energy storage batteries, according to our calculation, pet copper plating equipment will have a market space of 4-5 billion yuan in 2025.
Valuation
According to the company’s operating conditions, adjust the company’s profit forecast for 20222023 and increase the company’s profit forecast for 2024. It is expected that the company will achieve a revenue of 1.234/1.613/2.077 billion yuan and a net profit of 240 / 3.19/431 million yuan in 20222024. Under the background of the continuous prosperity of PCB industry and the explosion of pet copper plating demand, the company, as the leading company of vertical continuous electroplating equipment, will fully benefit and maintain the buy rating.
Main risks of rating
The prosperity of PCB industry is lower than expected; The promotion of PET composite copper foil was not as expected; Industry competition intensifies.
