\u3000\u30 Zhongyan Technology Co.Ltd(003001) 36 Shenzhen Sunway Communication Co.Ltd(300136) )
In 2021, the company’s mature businesses such as antenna, wireless charging and EMI / EMC maintained steady growth; New businesses such as LCP, BTB, UWB, passive components and automotive interconnection are accelerating their expansion and have contributed to revenue. With the gradual increase of new businesses, they will become the growth point of performance contribution. However, due to several reasons, we expect the performance to be under pressure in 2021: 1) the company is in the stage of business transformation and optimization, and the net profit has been affected periodically; 2) In 2021, the boom of the consumer electronics industry was weak, and the capacity utilization efficiency of mature businesses was low, affecting the gross profit margin; 3) In 2021, the price of raw materials rose rapidly, and the cost side of the company was also affected to some extent.
In terms of business expansion, the company continued to consolidate the steady development of mature businesses such as antenna, wireless charging and EMI / EMC, and accelerated the expansion of new businesses such as LCP, BTB, UWB, passive components and automotive interconnection.
1. In terms of LCP business: the company has the full process capability from LCP materials to LCP modules, and can provide customers with a one-stop solution of “LCP materials – LCP antenna – LCP modules”; In this field, with the precipitation of RF technology and continuous investment in recent years, the company can provide customers with LCP products with more specifications, higher precision, higher regulation performance, higher quality and lower cost. It has cooperated with many enterprises. At present, it is stepping up the expansion of key customer business and actively developing the development of related product applications.
2. In terms of passive components: according to the 2019 global passive components market data report released by ecia, the global passive components (RCL) sales in 2019 will be about US $27.7 billion, of which the demand for passive components in the fields of network communication, vehicle mounted, power and industry will reach US $12 billion, US $4.6 billion and US $2.9 billion respectively, showing a compound annual growth rate of 11.6%, 9.4% and 7.4% respectively compared with the market demand in 2017, The market maintained a sustained growth trend. With the trend of thinness, multifunction and high performance of electronic equipment, higher requirements are put forward for the size, capacity, frequency and integration of passive components.
At present, high-end passive components are monopolized by manufacturers in Japan, Korea and Taiwan, China, and there is a great demand for localization and self control. The company has been planning in the field of passive components for a long time, and has accumulated product development experience of various passive components in advance. The company has introduced high-end talents in the field of passive components from outside China, and completed the acquisition of juyongchang in March 2021 to quickly build the R & D and manufacturing capacity of resistance products. At present, the company is stepping up the expansion of resistance products. In the future, the company will gradually layout high-end capacitors and other passive component products, comprehensively enter the high-end passive component industry, and expand and strengthen the passive component business.
3. In terms of BTB business: with the advancement of 5g era, the market demand for BTB connectors by various electronic terminals such as smart phones and smart watches continues to expand. However, at present, the BTB connector market is mainly dominated by Japanese manufacturers, which hides huge domestic substitution opportunities. The company’s BTB connector has broken the monopoly of overseas manufacturers, achieved the breakthrough of Chinese suppliers to Chinese and foreign mainstream brand terminal manufacturers, and its technology has reached the international leading level. At present, the company is enriching more product models, accelerating the development of end customers and striving for greater market share.
4. In terms of automobile interconnection business: the company attaches importance to the development of automobile business. The company has developed many automobile customers in China and abroad, such as Volkswagen, Dongfeng Honda and Mercedes Benz, and can provide customers with on-board wireless charging, on-board antenna, UWB module and other products. The company is stepping up the development of automobile customers and their business, and will provide more automobile interconnection products according to customers’ needs in the future. In May 2021, the company officially joined the car connectivity consortium to accelerate the promotion of car digital keys. With the deepening of business cooperation with customers, the company will give full play to its main business advantages on the basis of existing industries and actively expand other automotive interconnection and other products according to the needs of customers.
5. In terms of UWB business: the company has made rich technical reserves and patent layout on UWB antenna and module, and the product’s positioning accuracy, transmission rate, power consumption, anti-interference ability and other technical indicators are at the leading level. The company has reached strategic cooperation with NXP (NXP semiconductor) to complement each other’s advantages and jointly promote the application of UWB in the fields of Internet of things and Internet of vehicles.
Profit forecast, valuation and rating: considering the weakness of the smart machine industry, we adjusted the forecast of net profit attributable to parent company from Shenzhen Sunway Communication Co.Ltd(300136) 2021 to 2023 to 760 million (- 43.36%), 1.162 billion (- 32.19%), 1.464 billion (- 33.91%), corresponding to 21-23pe of 20x / 13X / 10x respectively. In view of the steady growth of the company’s mature businesses such as antenna, wireless charging and EMI / EMC, new businesses such as LCP, BTB, UWB, passive components and automotive interconnection have begun to increase gradually and maintain the “buy” rating.
Risk tip: mobile phone shipment is less than expected; The expansion of new business and new products did not meet expectations.
