\u3000\u3 Shengda Resources Co.Ltd(000603) 936 Bomin Electronics Co.Ltd(603936) )
Event: in the first quarter of 2022, the company achieved an operating revenue of 661 million yuan, a year-on-year decrease of 5.55%, a net profit attributable to the parent of 41 million yuan, a year-on-year decrease of 12.84%, and a net profit not attributable to the parent of 32 million yuan, a year-on-year decrease of 26.06%.
In 2021, the company achieved an operating revenue of 3.521 billion yuan, a year-on-year increase of 26.39%, a net profit attributable to the parent of 242 million yuan, a year-on-year decrease of 1.96%, and a net profit not attributable to the parent of 211 million yuan, a year-on-year decrease of 2.79%.
China’s epidemic has dragged down demand and logistics, focusing on the layout and consolidating the foundation for growth. In the first quarter of this year, especially in March, outbreaks occurred in the Pearl River Delta and Yangtze River Delta, China’s electronic cluster. On the one hand, it dragged down the demand of relevant downstream. On the other hand, it caused the shutdown of most enterprises and the delay of product delivery caused by blocking logistics. Under this environment, the company’s revenue and performance in the first quarter fell slightly year-on-year. However, even in the face of many uncertain factors, the company still promotes various layouts step by step along the established objectives and directions, such as the increase of the production rate of new PCB production lines, the investment in new production lines, the development of new core downstream, and the improvement of integrated solution ability. Overall, the company’s growth gene has been further strengthened, waiting for the performance after the epidemic eased.
Endogenous + extension simultaneously, optimize solution allocation and strengthen the integrated solution ability of upstream and downstream of the industrial chain. The company is one of the few enterprises in China that has advanced from simple PCB supply to integrated services of “PCB + components + electronic assembly + Solutions”. Especially in the past two years, the company has continuously optimized the configuration of the solution business group, and achieved effective coordination with the PCB business group, so as to realize effective cost control and With the improvement of economic benefits and the enhancement of customer stickiness, the proportion of solution revenue is increasing, and the scale effect is gradually emerging. The establishment of the micro core business unit enables the company to have China’s leading AMB / DBC / DPC production process, and then derive high value-added products and businesses such as ceramic lining, microwave passive components and electronic assembly of new energy vehicles. The application downstream of the solution business can be extended from home appliances to military industry, new energy (automobiles, motorcycles, energy storage) and power semiconductors. The company has become the first supplier of the electronic control system of Infiniti five wheel electric vehicle equipped with Huawei Hongmeng Zhilian ecology. It is a successful case of the company’s one-stop service business model. In the future, it is expected to achieve breakthroughs for more customers and constantly cultivate new performance growth points.
The layout of new energy vehicles has been continuously consolidated, recognized by core customers and highlighted competitive advantages. In recent years, relying on the patented product “strong and weak current integrated special circuit board” of PCB business group, the company actively seeks to provide one-stop services integrating design, production, electronic assembly and commissioning for new energy vehicle customers, and seeks to transform its role as a professional PCBA solution supplier of new energy vehicle power control module. The newly established micro core business division has new energy vehicle electronic assembly, and the ceramic lining board is used as the carrier of high-voltage SiC and IGBT, In the future, there will be a large market promotion space for new energy vehicles. The newly developed high-density and high-speed PCB products supporting chip bypass strategy have been recognized by customers and produced in batch. On the whole, the company’s layout in the field of new energy vehicles is constantly improving. At present, it has successfully developed Shanxi Guoxin Energy Corporation Limited(600617) automobile leading enterprises and obtained fixed-point cooperation projects. Automobile enterprises are cautious in the certification and import process of upstream parts, especially the parts with safety design such as three electricity system. High verification difficulty and long import cycle have become the company’s natural competitive barrier. When the new energy vehicle industry is about to break out, The value of the company’s past layout is gradually reflected, and the proportion of the company’s automotive electronics revenue is expected to continue to increase in the future.
Focus on high value-added boards such as HDI and special boards, and steadily expand PCB production capacity. At present, although China’s PCB output value has been in the leading position in the market, the proportion of multi-layer boards is still in the leading position. With the upgrading of consumer electronics and the rise of automotive electronics, PCB products will gradually develop to high performance and high density. HDI, rigid flex combination board and IC carrier board are expected to become the main growth force in the follow-up. The company’s layout in the PCB field is always technology-oriented. Jiangsu Bomin phase II project, which locates HDI and IC carrier boards, is expected to reach production this year. Meizhou new generation electronic information industry investment and expansion project, which locates high-rise multi-layer boards and special boards, is steadily advancing. The steady expansion of PCB production capacity will be the basis for the company’s future growth.
Profit forecast and investment rating: maintain the buy rating. In recent years, the company has continuously obtained new customer orders in the main business of HDI and the related fields of vehicle mounted, special and military PCB, and the business field has been extended back to many fields such as electronic control board, integrated embedded PCB, power semiconductor substrate and so on through several sub business departments. The development of the solutions business group has entered an accelerated period, and it is expected to form a good trend of simultaneous development in many fields in the future. However, on the whole, since the first quarter of this year, the impact of the shortage of materials in the consumer electronics supply chain and the blocking of epidemic logistics has had a certain impact on the PCB industry and the terminal industry. We expect the net profit of the company from 2022 to 2024 to be 289 million, 411 million and 523 million respectively, and the current share price corresponds to pe1.5 billion 29, 10.73 and 8.45 times, maintaining the buy rating.
Risk tips: (1) the growth rate of production capacity of Jiangsu Bomin is lower than expected; (2) China’s automobile electronization rate and the progress of on-board PCB promotion are less than expected; (3) The expansion of new customers is less than expected.
