\u3000\u3 Shengda Resources Co.Ltd(000603) 115 Nantong Haixing Electronics Co.Ltd(603115) )
[matters]
On April 19, 2022, the company issued a pre increase announcement on the performance of the first quarter of 2022. It is expected that the net profit attributable to the shareholders of the listed company in 2022q1 will increase by 32 million yuan to 34 million yuan compared with the same period last year, up 105.73% to 112.34% year-on-year; Net profit excluding non recurring profit and loss will increase by 29 million yuan to 31 million yuan compared with the same period last year, with a year-on-year increase of 104.27% to 111.46%.
[comments]
2022q1 made a good start, and the proportion of high-end product business continued to rise. In the first quarter, the company made remarkable achievements, mainly relying on the flexible allocation of resource investment and taking the lead in investing in fixed growth projects with its own funds. Some projects reached production efficiency and quickly stimulated the release of production capacity, laying a good foundation for the release of performance in 2022. At present, the production capacity is still improving. In addition, benefiting from the early layout of downstream emerging markets (photovoltaic power generation, new energy vehicles, data centers, etc.), the company seized the market opportunities, continuously expanded the proportion of high-specification and high-value products by continuously optimizing the product structure, and ensured the high-quality, stable and batch delivery of key customers and key products at the supply side, which effectively improved the profitability of the company. The profit growth rate of 2022q1 has exceeded the previous estimate.
Downstream customers continue to expand production and effectively undertake market demand. The continuous outbreak of terminal emerging markets has driven the rapid development of the whole industrial chain. From the downstream of the industrial chain, many customers revealed on the investor interaction platform that the demand for aluminum electrolytic capacitors is still in short supply, the product delivery cycle is still as long as six months, and the market boom remains high. It is expected that driven by import substitution and emerging market demand, the performance of aluminum electrolytic capacitor is expected to maintain a high growth rate of more than 20%. Many customers are actively expanding production capacity according to orders, which provides strong support for the matching of Nantong Haixing Electronics Co.Ltd(603115) new production capacity and helps the company maintain a production rhythm of full production and full sales.
Firmly cut into the emerging track, and the company signed an investment agreement. Recently, Ningxia Haili Electronics Co., Ltd., a wholly-owned subsidiary of the company, signed an investment framework agreement with the Management Committee of Ningxia Shizuishan high tech Zone, disclosing the construction plan of “high-performance electrode foil project for new energy, big data and cloud computing”. It is planned that the total investment will not exceed 1.5 billion yuan, and 72 high-performance electrode foil production lines and supporting engineering facilities will be added. After the project is fully completed, the annual output capacity of electrode foil will be about 19 million square meters, The company’s ability to resist risks will be further enhanced. Although the specific investment and construction period of the project has not been determined, and the investment and construction cycle is long, it can still be seen that the company, in combination with its own resource conditions (making full use of Ningxia photovoltaic resources), continuously improves the proportion of high value-added products in emerging markets, continuously reduces the company’s operating costs and improves the competitiveness of the company’s products. Therefore, it is firmly optimistic about the company’s future development potential.
[investment suggestions]
Based on the performance forecast released by the company and the above driving factors, we maintain the forecast of the company’s operating revenue in 2021, 2022 and 2023, which are RMB 1.667/2.06/2.663 billion respectively, the net profit attributable to the parent company is RMB 221/3.02/403 million respectively, the EPS is RMB 0.92/1.26/1.68 respectively, and the corresponding PE is 20 / 15 / 11 times respectively. Under the continuous development trend of emerging markets such as photovoltaic power generation, energy storage, new energy vehicles, 5g and big data center, with the accelerated release of expanded production capacity, the company is expected to continue to benefit from the dividends of high industrial prosperity. Therefore, we are firmly optimistic about the release of the company’s performance this year and maintain the “buy” rating.
[risk tips]
The progress of raised investment projects is less than expected;
The demand for aluminum electrolytic capacitors is lower than expected;
Affected by repeated epidemics and sealing and control policies;
The progress of conversion of foreign enterprises to production was less than expected.
