\u3000\u3 Guocheng Mining Co.Ltd(000688) 700 Kunshan Dongwei Technology Co.Ltd(688700) )
Performance: in 2021, the company achieved an operating revenue of 805 million yuan, a year-on-year increase of 45.11%, a net profit attributable to the parent company of 161 million yuan, a year-on-year increase of 83.21%, and a net profit not attributable to the parent company of 149 million yuan, a year-on-year increase of 89.23%. In the fourth quarter, the operating revenue was 241 million yuan, a year-on-year increase of 21.57%, and the net profit attributable to the parent company was 50 million yuan, a year-on-year increase of 46.07%.
The demand for PCB special equipment is strong, and the special equipment for negative electrode materials of new energy power batteries is gradually developing. In 2021, driven by the recovery of the prosperity of China’s PCB industry, the investment scale of new construction and expansion of the industry has increased accordingly. Benefiting from this, the sales revenue of the company’s high-end printed circuit electroplating special equipment (including vertical continuous electroplating equipment and horizontal surface treatment equipment) increased by 36.19% year-on-year to 662 million yuan, and the gross profit margin increased by 472 PCT To 45.27%. In addition, the advantages of PET composite copper foil compared with traditional electrolytic copper foil have made lithium battery enterprises, copper foil suppliers and PET film suppliers increase their weight one after another, promoting the demand for special equipment for negative electrode materials of new energy batteries, which contributed 9.6566 million yuan of operating income to the company.
The growth of contract liabilities + the release of new production capacity lay the foundation for growth in 2022. In the annual report, the company’s forward-looking indicators predict that the demand will continue to improve in 2022: the contract liabilities at the end of this report are 215 million yuan, an increase of 34.54% year-on-year at the end of 2020, indicating that the overall number of newly signed orders will further increase in 2021, laying a good foundation for the growth in 2022. On the other hand, the output and efficiency of coil horizontal membrane electroplating equipment for negative electrode materials of new energy power batteries are 5 and 1 respectively, The difference between production and sales is mainly related to the company’s product delivery and revenue recognition rhythm. The remaining four units are expected to be recognized in 2022. In terms of supply, in 2021, the company produced 201 sets of various equipment, and implemented the expansion of PCB vertical continuous electroplating equipment (phase I), horizontal equipment industrialization construction project and other construction projects. Among them, the horizontal equipment industrialization construction project has completed the plant construction, and will gradually enter the production stage in 2022. According to the prospectus plan, the project will increase the annual output of 40 sets of horizontal copper equipment and 30 sets of roll type horizontal coating equipment after the project is completed. Overall, the demand and supply of the company’s products are expected to continue to grow in 2022, laying a good foundation for the growth of revenue and performance.
Electroplating of negative electrode materials and photovoltaic copper plating of new energy cells are ready to go. In terms of new energy batteries, compared with electrolytic copper foil, pet electrosectord copper foil has the advantages of high safety, high specific capacity, long service life and high compatibility, which can effectively improve the performance of current collecting materials for power batteries and energy storage batteries, and improve the safety and endurance of batteries. At present, it is in the stage of mass production, has better penetration space, and is expected to become one of the mainstream negative current collecting materials; Photovoltaic copper plating equipment is used for the preparation of photovoltaic cell electrode. Replacing the existing silver electrode with copper can effectively reduce the manufacturing cost of cell (especially hjt cell). At present, this process is becoming the discussion and promotion direction of mainstream hjt cell manufacturers. In the future, when the demand for new energy cells and photovoltaic copper plating equipment increases, the company is expected to usher in a new era of performance and valuation.
The prosperity of PCB equipment still has room for improvement. At present, due to the overall weakness of PCB demand in the first quarter, investors are worried that the prosperity of production expansion may enter a downward stage. However, as we emphasized in the previous report, at present, a considerable number of backward PCB production capacity in China will be replaced or cleared. The judgment of this round of PCB investment cycle should not be too narrow. In addition, although the global PCB production capacity has been concentrated in China, such as HDI, IC carrier FPC and other high-end sectors are still short of production capacity. At present, China’s mainstream PCB manufacturers are successively cutting into the field of high-end sectors, and it is expected to take over high-rise and multi-layer PCB boards in the future to support the rhythm of industry production expansion and investment. Compared with overseas equipment, Dongwei’s vertical continuous electroplating equipment has taken the lead in key indicators such as electroplating uniformity and through hole rate (TP), and has been applied to high-end boards such as rigid flex bonding board, high-frequency board, HDI and IC carrier board. Technological leadership helps the company take the lead in benefiting from the downstream investment boom cycle.
Profit forecast and investment rating: maintain the buy rating. Based on the above analysis, we expect the net profit of the company from 2022 to 2024 to be 230 million yuan, 322 million yuan and 434 million yuan respectively, and the current share price corresponding to PE is 43.50, 31.16 and 23.07 times respectively, maintaining the buy rating.
Risk tips: (1) PCB expansion cycle is blocked or delayed; (2) The introduction of lithium battery composite copper foil was less than expected; (3) The ramp up progress of the company’s production capacity was less than expected.
