Suzhou Etron Technologies Co.Ltd(603380)
[key points of investment]
According to the annual report of 2021 disclosed by the company, the revenue in 2021 was RMB 1.752 billion, with a year-on-year increase of 35.88%, and the net profit attributable to the parent was RMB 227 million, with a year-on-year increase of 37.33%. Corresponding to 2021q4, the single quarter revenue was 539 million yuan, a year-on-year increase of 52.09%. In Q4, the net profit attributable to the parent company in a single quarter was 57.42 million yuan, a year-on-year increase of 22.48%.
The company is deeply engaged in the global electronic manufacturing market and has established cooperative relations with more than 270 customers in various sub sectors around the world, involving more than 5000 products and more than 60000 kinds of raw materials. The company’s products cover five application fields: industrial control, communication, medical electronics, automotive electronics and consumer electronics, and provide global customers with high-quality, multi variety, fast and flexible electronic manufacturing services. In 2021, the revenue of the company’s communication, industrial control, consumer electronics, medical electronics and automotive electronics products maintained growth, among which the revenue of industrial control and medical electronics products increased relatively. In 2021, industrial control business achieved a revenue of 729 million yuan, a year-on-year increase of 35.68%, and medical electronics business achieved a revenue of 331 million yuan, a year-on-year increase of 59.21%.
During the period, in order to cope with the supply shortage of global electronic materials, especially chips, the company organized a material recovery team headed by the general manager to take a series of measures to deal with the supply shortage. Previously, the company cooperated with Texas Instruments (TI), a world-famous semiconductor company, and completed the development and testing of the function of the direct data docking system with its ERP system, realizing the use of EDI data exchange system, which greatly improved the timely delivery and processing of purchase forecast and orders. In 2021, the company further promoted the application of the system and realized EDI data exchange system with DigiKey, arrow, Avnet and other major suppliers, ensuring the timely delivery of products and providing a solid foundation for the company to improve management efficiency in the future.
At present, the company has a R & D team of more than 250 people, which can provide customers with diversified services including new product design, product update design, device alternative design and assisting customers in the early R & D stage according to customers’ direct needs or market demand changes, so as to provide customers with effective value-added services and better improve customer stickiness. In 2021, the company’s R & D investment reached 78.91 million yuan, a year-on-year increase of 46.81%, accounting for 4.50% of revenue. During the year, the company laid out big data, 5g Internet, automatic driving, Cecep Solar Energy Co.Ltd(000591) and wind energy new energy businesses, developed a number of potential new customers, and laid the foundation for the follow-up rapid development.
The global EMS industry is showing a growing trend. According to the report of newventureresearch, the scale of EMS industry will be $594.7 billion in 2020. Benefiting from the vigorous development of various sub industries, it is expected to reach $838.3 billion by 2025. There are strong barriers to entry in the industry. The company has excellent competitiveness in flexible production, lean manufacturing, process technology and customer relations, and is expected to significantly benefit from the continuous growth of the industry.
[investment suggestions]
It is estimated that the revenue from 2022 to 2024 will be 2.291 billion yuan, 2.925 billion yuan and 3.614 billion yuan respectively, the net profit attributable to the parent company will be 306 million yuan, 408 million yuan and 500 million yuan respectively, the corresponding EPS will be 1.90, 2.53 and 3.10 yuan / share respectively, and the corresponding current PE will be 17, 13 and 11 times respectively, so it is rated as “overweight”.
[risk tips]
The market demand is less than expected
The shortage of materials is difficult to ease
The exchange rate fluctuates violently
