\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 08 Chaozhou Three-Circle(Group) Co.Ltd(300408) )
Event: on April 24, the company released its annual report for 2021, realizing an operating revenue of 6.218 billion yuan, a year-on-year increase of 55.69%; The net profit attributable to the parent company was 2.011 billion yuan, a year-on-year increase of 39.68%; The net profit deducted from non parent company was 1.828 billion yuan, with a year-on-year increase of 46.64%. Among them, 21q4 achieved an operating revenue of 1.632 billion yuan in a single quarter, a year-on-year increase of 30.90%; The net profit attributable to the parent company was RMB 304 million, a year-on-year decrease of 30.52%; The net profit deducted from non parent company was RMB 258 million, a year-on-year decrease of 21.82%.
5g drives the industrial demand to improve, and the three major businesses achieve rapid growth: benefiting from the rapid popularization and application of 5g, the market demand for communication / Automobile / consumer electronics continues to grow, superimposed with the acceleration of domestic substitution process, the business scale of the company increased rapidly in 2021, realizing a revenue of 6.218 billion yuan, yoy + 55.69%; The net profit attributable to the parent company was 2.011 billion yuan, yoy + 39.68%; The net profit deducted from non parent company was 1.828 billion yuan, yoy + 46.64%. Among them, 1) electronic components and materials (mainly MLCC) achieved a revenue of 2.103 billion yuan, yoy + 59.55%, accounting for 33.82%, and Shouchao communication components became the largest business; The gross profit accounts for 37.14% and the gross profit margin is 53.53%; 2) The revenue of communication components (mainly optical fiber ceramic insert and sleeve) was 1.76 billion yuan, yoy + 31.70%, accounting for 28.30%; The gross profit accounts for 29.02% and the gross profit margin is 49.98%; 3) The revenue of semiconductor components (mainly ceramic packaging base) was 1.170 billion yuan, yoy + 76.23%, accounting for 18.82%; The gross profit accounted for 14.51% and the gross profit margin was 37.58%.
Breaking through the core barrier of ceramic powder, the advantages of vertical integration are clear: the manufacturing technology of core material high-performance ceramic powder is the main bottleneck restricting the development of China’s electronic ceramic industry. Therefore, the industry has been monopolized by Japanese, American and European enterprises for a long time. According to the data of global petroleum and chemical economic analysis quoted by Jibang semiconductor observation, 65% of the market share of electronic ceramic powder is occupied by Japanese enterprises. The formula of powder needs long-term practice and exploration, and needs to take into account the cost, performance and scale. Once mastered, it has high barriers. The company has more than 50 years of R & D experience in the field of electronic ceramic components, has mastered some ceramic powder formulas and achieved mass production, forming a production system of raw materials + equipment + process, which is also the source of the company’s cost advantage. The profit margin of the company has always maintained a high level, with a gross profit margin of 48.75% and a net profit margin of 32.38% in 2021. The advantages of vertical integration are clear.
MLCC has a broad space for localization and capacity expansion of fixed size: according to the data of China electronic components industry association, the global MLCC market scale will be 101.7 billion yuan in 2020, about 114.8 billion yuan in 2021, yoy + 12.9%. It is expected to reach 149 billion yuan in 2025, with a five-year compound growth rate of 7.9%. China is the world’s largest MLCC market, with a market size of 46 billion yuan in 2020, accounting for more than 45%. MLCC market is highly monopolized by Japanese and Korean enterprises, and Chinese manufacturers account for only 6% of the global share. Under the triple drive of national strategic guidance, end customer support and gradual release of production capacity, China’s MLCC enterprises have ushered in an important period of development. According to the company’s announcement, the company has made smooth progress in the breakthrough of high-end MLCC technology, and has mass produced high-capacity products in the size of 0201 ~ 2220 on a large scale. In 2020, the company raised about 1.874 billion yuan (originally planned to be 1.895 billion yuan) and plans to invest in the “production expansion and technical transformation project of high-quality multilayer chip ceramic capacitors for 5g communication”. By the end of 21, the investment progress is 62.87%. It is expected that all production capacity will be reached by the end of 22, the new MLCC capacity will be about 240 billion pieces / year, and the sales revenue will be 1.56 billion yuan / year; In 2021, the company plans to raise 3.75 billion yuan to invest in the “production expansion project of high-capacity series multilayer chip ceramic capacitors”. It is expected that the construction period will reach 20% / 60% / 100% respectively in three years. All production will be reached in May 2024, with a new MLCC capacity of 300 billion / year, and a sales revenue of 2.25 billion yuan / year.
Investment suggestion: we estimate that the company’s operating revenue from 2022 to 2024 will be 8.207 billion yuan, 9.891 billion yuan and 11.922 billion yuan respectively, the net profit attributable to the parent company will be 2.610 billion yuan, 3.197 billion yuan and 3.863 billion yuan respectively, the EPS will be 1.36 yuan, 1.67 yuan and 2.02 yuan respectively, and the corresponding PE will be 20.4 times, 16.7 times and 13.8 times respectively, maintaining the “Buy-A” investment rating.
Risk warning: downstream demand is less than expected; The production expansion progress is less than expected; Market competition intensifies.
