\u3000\u30 Fawer Automotive Parts Limited Company(000030) 31 Hebei Sinopack Electronic Technology Co.Ltd(003031) )
Event: the company released the annual report of 2021 and the report of the first quarter of 2022. In 2021, the company achieved an operating revenue of 1.014 billion yuan, a year-on-year increase of 24.21%, a net profit attributable to the parent company of 122 million yuan, a year-on-year increase of 23.96%, and a net profit not attributable to the parent company of 107 million yuan, a year-on-year increase of 23.39%. In the first quarter of 2022, the company realized an operating revenue of 292 million yuan, a year-on-year increase of 30.93%, and the net profit attributable to the parent company was 36 million yuan, a year-on-year increase of 26.05%, deducting 31 million yuan of non attributable net profit, a year-on-year increase of 16.92%. The performance is in line with market expectations.
Key investment points
High speed growth of consumer electronics business and optimization of revenue structure: in 2021, the company’s consumer electronics ceramic shell and substrate business achieved a revenue of 122million yuan, a year-on-year high-speed growth of 433.01%, and the proportion of revenue increased significantly to 12%, a year-on-year growth of 9.2pct. With the development and maturity of 5g communication and intelligent technology, and the rapid expansion of demand in consumer electronics fields such as sound meter, sensor and communication electronics, the company’s consumer shell has realized mass production. The business of electronic ceramic shell for communication devices achieved a revenue of 725 million yuan, a year-on-year increase of 13.04%, and the proportion of revenue decreased to 71.49%, which is still the core business of the company. Thanks to the domestic substitution trend, the company’s domestic revenue reached 815 million yuan, a year-on-year increase of 29.34%, and the proportion of revenue increased to 80.42%. The company’s products and regional income structure have been further optimized.
The investment progress of consumer electronics production line has exceeded 1 / 3, and the R & D investment contributes to efficient development: by 2021, the company has invested 112 million yuan in the construction project of consumer electronics ceramic product production line, and the investment progress has reached 33.53%. In 2022, the company will focus on accelerating the construction of raised investment projects and strive for the early formation of production capacity of consumer electronics production lines. In 2021, the company invested 141 million yuan in R & D, with a year-on-year increase of 29.91%, and the R & D expense rate was 13.91%, the highest in 20182021. R & D expenses are mainly invested in key fields and core products such as optical communication, wireless communication and consumer electronics, so as to accelerate the speed of innovation and maintain the competitive advantage of the company’s products.
Announce the acquisition plan and launch the third generation semiconductor business: the company announced on January 17, 2022 that it plans to acquire the RF chip business of Gan communication base stations of CETC 13, as well as the 100% equity of Bowei company and Guolian Wanzhong held by shareholders such as CETC 13. As of April 28, the due diligence, audit and evaluation related work involved in this transaction of the company had not been completed. CETC is committed to building Hebei Sinopack Electronic Technology Co.Ltd(003031) into a first-class high-tech enterprise in the semiconductor field in China with core business capabilities such as Gan communication base station RF chips and devices, SiC Power chips and their applications, electronic ceramics and so on.
Profit forecast and investment rating: with the further development and maturity of 5g communication technology and the gradual completion of the company’s consumer electronics ceramic production line, the company’s consumer electronics business is expected to usher in rapid development. Meanwhile, if the acquisition plan is approved, the company will become a first-class semiconductor enterprise in China. However, due to the gradual increase of the company’s R & D investment, we lowered the forecast of the net profit attributable to the parent company from 2022 to 2023 to 155 (- 0.09) / 193 (- 13) million yuan, and the net profit attributable to the parent company in 2024 is expected to be 236 million yuan, maintaining the “buy” rating.
Risk tip: the acquisition progress is not as expected; Technological innovation and operational risks of the underlying assets; The post acquisition integration is less than expected; The promotion of products in the field of consumer electronics was less than expected.
