\u3000\u3000 Kunshan Dongwei Technology Co.Ltd(688700) (688700)
The company released the annual performance forecast for 2021. It is expected to realize the net profit attributable to the owners of the parent company from 150 million yuan to 170 million yuan in 2021, with a year-on-year increase of 70.82% to 93.60%; The net profit attributable to the owner of the parent company after deducting non recurring profits and losses was 140 million yuan to 160 million yuan, with a year-on-year increase of 77.35% to 102.69%.
Key points supporting rating
Benefiting from the demand growth in downstream application fields, the net profit growth is in line with expectations. The company’s net profit attributable to the parent company in 2021 is expected to increase by 70.82% to 93.60% year-on-year, realizing a significant increase, mainly due to the strong demand growth in downstream application fields. The company grasps market opportunities, continuously strengthens new product R & D and market development, and the sales volume continues to grow. At the end of the third quarter of 2021, the contract liabilities were 198 million yuan, an increase of 38 million yuan over the end of 2020, indicating that the company has full orders on hand and provides performance guarantee for the whole year of 2021 and 2022.
The PCB industry continues to boom, with prominent advantages of vertical continuous electroplating equipment and high demand certainty. According to prismark’s statistics, benefiting from the improvement of 5g penetration and the expansion of intelligent device application scenarios, the PCB output value will reach US $86.33 billion in 2025, with an annual compound growth rate of 5.8%. Vertical continuous electroplating equipment has the advantages of high safety, good performance, energy conservation and environmental protection, simple maintenance and high cost performance. It has gradually become the mainstream technology development direction of the industry. According to the data of printed circuit information and CPCA, it is estimated that the market scale of China’s vertical continuous electroplating equipment will reach 4.105 billion yuan by 2025. The company is the leader of vertical continuous electroplating equipment, accounting for about 30% of the market. In the future, it will fully benefit from the growth of the demand for vertical continuous electroplating equipment.
The night before the demand for PET composite copper foil broke out, Dongwei pet copper plating equipment had obvious first mover advantage. The leading power battery manufacturer Contemporary Amperex Technology Co.Limited(300750) 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 life and strong compatibility, which can completely solve the industry problem of heating out of control due to internal short circuit, and effectively improve the battery capacity, It has broad application prospects in the future. At present, Kunshan Dongwei Technology Co.Ltd(688700) roll type horizontal coated copper wire and bilateral fixture conductive ultra-thin roll type horizontal coated wire have reached the mass production requirements and technical conditions, 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
Maintain the company’s revenue forecast of RMB 819 / 1138 / 1640 million and net profit of RMB 166 / 245 / 379 million from 2021 to 2023. 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
