\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 79 Electric Connector Technology Co.Ltd(300679) )
Event: the company released its 2021 annual report and the first quarterly report of 2022 on April 27, 2022. In 2021, the company realized an operation of 3.246 billion yuan, a year-on-year increase of 25.20%, and realized a parent company profit of 372 million yuan, a year-on-year increase of 38.27%; In 2022q1, the revenue was 758 million yuan, a year-on-year decrease of 7.09%, and the parent company profit was 88 million yuan, a year-on-year decrease of 14.07%.
Comments: the company has been deeply engaged in the field of RF connectors. Relying on years of continuous R & D investment and process accumulation, while taking root in the field of mobile terminals, the company has penetrated and developed into the fields of automobiles, wearable products, Internet of things and so on. In addition to automobiles, the company has deepened cooperation with head chip manufacturers and made a good breakthrough in module products. In 2022, the company is expected to start large-scale shipments to overseas customers, improve the company’s international market share, and lay a solid foundation for further expanding overseas high-quality industries and leading customers.
Quarterly, the company achieved revenue of 814 million yuan and 758 million yuan in 2021q4 and 2022q1, respectively, with a year-on-year increase of 11.27% and – 7.09%, and 89 million yuan and 88 million yuan respectively, with a year-on-year increase of 12.48% and – 14.07%. In the first quarter of 2022, the company’s performance declined, mainly because the company’s current revenue is still dominated by the mobile phone industry. Therefore, the decline in mobile phone sales has greatly affected the company’s performance in that quarter. We expect the rapid growth of automobile business to offset the impact of the decline in mobile phone sales to a certain extent.
The caliber of automobile connector was disclosed for the first time, and the profitability was greatly improved. In the annual report, the company disclosed the income caliber of automobile connectors for the first time. Last year, the company achieved an income of 312 million yuan, a year-on-year increase of 236.21%, and the proportion of income increased from 3.58% in 2020 to 9.62%; Meanwhile, the gross profit margin of the company’s automobile connector was 38.94%, an increase of 8.25 PCT year-on-year. The company’s automobile connectors have been imported into the supply chains of major Chinese automobile manufacturers such as Geely, great wall, Byd Company Limited(002594) , Chang’an, etc. with the continuous development of automobile intelligence, the company’s automobile connector business capacity and sales are expected to increase gradually, and the profitability is expected to increase gradually under the support of scale effect.
Layout the international market and increase the global market share. The subsidiary Henghe Dingfu increased overseas customers and the gross profit margin improved; At the same time, in terms of BTB business, the company has deepened cooperation with head chip manufacturers for many years and made a good breakthrough in module products. In 2022, the company is expected to start large-scale shipments to overseas customers. The company’s overseas business layout is bearing fruit, some product lines have achieved breakthroughs for overseas customers, and the company’s products have broad downstream applications. We expect that with the continuous deepening of cooperation between the company and overseas customers, it is expected to introduce more product lines and usher in a new growth curve except for automobiles.
Investment suggestion: due to the sluggish sales of mobile phones since the beginning of 2022 and the uncertain impact of the Chinese epidemic, the company’s profit forecast was lowered, and the net profit attributable to the parent company in 20222024 was adjusted from 551 / 753 million yuan to 5.00/7.53/9.41, maintaining the “buy” rating.
Risk tip: the downstream mobile phone industry is less prosperous than expected, the acquisition progress is less than expected, the automatic driving progress is less than expected, the volume of automobile customers is less than expected, the acquisition target company cannot achieve the expected income, and the repurchase plan cannot be implemented smoothly
