\u3000\u3 China Vanke Co.Ltd(000002) 938 Avary Holding (Shenzhen) Co.Limited(002938) )
Key investment points
Event overview
On April 28, the company released the first quarterly report of 2022. In Q1 of 2022, the operating revenue was 7.076 billion yuan, a year-on-year increase of 24.4%, the net profit attributable to the parent was 590 million yuan, a year-on-year increase of 69%, deducting the net profit not attributable to the parent was 590 million yuan, a year-on-year increase of 157%, the gross profit margin in 2022q1 was 19.8%, a year-on-year decrease of 1.2pct, the net profit margin was 8.4%, and a year-on-year increase of 2.2pct.
Miniled products increased in volume, driving the company's performance growth in the first quarter
Benefiting from the large volume of miniled products, the company achieved a revenue of 7.076 billion yuan in 2022q1, a year-on-year increase of 24.4%; Affected by the price rise of raw materials and other factors, the gross profit margin of the company in 2022q1 decreased by 1.2pct to 19.8% year-on-year; The net interest rate of 2022q1 was 8.4%, with a year-on-year increase of 2.2pct. The increase of the company's net interest rate was mainly due to the improvement of cost control ability, and the expense rate decreased significantly. The sales expense rate of 2022q1 was 0.5%, with a year-on-year decrease of 0.8pct, and the management expense rate was 3.8%, with a year-on-year decrease of 1.6pct; The net profit attributable to the parent company was RMB 590 million, with a year-on-year increase of 69%, and the net profit not attributable to the parent company was RMB 590 million, with a year-on-year increase of 157%. The growth rate of net profit attributable to the parent company after deduction was significantly higher than that of net profit attributable to the parent company, which was mainly due to the government subsidy of RMB 130 million received by 2021q1 company, which had a great impact on non recurring profits and losses.
The production capacity continues to upgrade and the subsequent growth momentum is sufficient
The company plans to spend 4.3 billion yuan of capital expenditure in 2022, which will continue to be used for the expansion of soft board, HDI board, SLP carrier board and high-end hard board capacity. 1) In terms of soft board: the company's raised investment project Huai'an flexible multilayer printed circuit board production expansion project has been invested, and all the soft board expansion investment plans planned at the beginning of 2021 have been put into operation. The company's phase I investment plan of Taiwan Kaohsiung FPC project is also continuously promoted. It is expected that the demand for soft board will further increase with the rapid volume of VR / AR, folding machine and other products in the future. 2) In terms of hard board: Qinhuangdao high-level HDI printed circuit board expansion project invested by the company has been invested in 2020; The company's Huai'an ultra-thin circuit board investment plan has been mass produced, and the production capacity is planned to be 93000 square meters / month; Huai'an comprehensive insurance park investment plan and hard board transformation investment plan are being implemented as planned. After the project is put into operation, it will help the company obtain the market opportunities brought by the rapid development of servers and automotive electronics; The high-end HDI and advanced SLP carrier board intelligent manufacturing project in Huai'an new park is under construction as planned. After the completion of the project, it will further enhance the company's comprehensive competitiveness in high-end HDI and SLP. It is expected that with the company's large volume of miniled products and the rapid expansion in the field of Automotive servers, there will be sufficient growth momentum in the future.
Investment advice
We expect the net profit attributable to the parent company in 2022, 2023 and 2024 to be RMB 4.098/49.34/5.874 billion respectively. According to the closing price of 2022 / 4 / 28, PE is 16 / 13 / 11 times, maintaining the "buy" rating.
Risk tips
The newly-built capacity is less than expected, the downstream demand is less than expected, the market development is less than expected, and the risk of peripheral environment fluctuation.
