\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 08 Chaozhou Three-Circle(Group) Co.Ltd(300408) )
Events
Chaozhou Three-Circle(Group) Co.Ltd(300408) released the report for the first quarter of 2022: in the first quarter of 2022, the company achieved an operating revenue of 1.402 billion yuan, a year-on-year increase of 7.07%; The net profit attributable to the parent company was 498 million yuan, a year-on-year increase of 1.59%; The net profit deducted from non parent company was 420 million yuan, with a year-on-year increase of 0.13%.
Key investment points
Under the background of weak consumer electronics demand, the company resisted the pressure and the gross profit margin level was repaired
In the first quarter of 2022, against the background of the epidemic and the weak demand for downstream consumer electronics, the company actively responded to the environmental pressure, and its operating revenue maintained growth at the high growth level in the same period last year. In terms of profitability, the gross profit margin and net profit margin of 2022q1 company were 49.37% and 35.53% respectively, with a month on month increase of 8.46pct and 16.89pct respectively. The gross profit margin and net profit margin were repaired month on month and basically recovered to the average level. The operating cash flow was 473 million yuan, a year-on-year increase of 19.65%. In terms of expenses, 2022q1 company achieved sales, management and financial expense rates of 1.14%, 7.78% and – 2.70% respectively, of which the significant reduction of financial expenses helped the company’s net interest rate rise. In terms of R & D expenses, the company continued to increase R & D investment to improve the core competitiveness of products and meet customer needs. In 2022q1, the R & D expenses of the company were 112 million yuan, a year-on-year increase of 68.65%.
The advantages of vertical integration are obvious. Take advantage of domestic substitution to accelerate the expansion of MLCC production scale
Under the background of trade friction, the supply chain of electronic components has accelerated its transfer to China and continued to drive the market scale of electronic components. According to the data of China electronic components industry association, in 2020, the global MLCC market scale increased by 11.1% year-on-year to 101.7 billion yuan. It is expected to reach 114.8 billion yuan in 2021, a year-on-year increase of 12.9%, and 149 billion yuan in 2025, with a five-year compound growth rate of 7.9%. According to the prediction of the Ministry of industry and information technology, more than 6 Shenzhen Fountain Corporation(000005) g base stations will be built in 2022, driving the development of the market of communication components such as optical fiber connectors. As a ceramic material platform enterprise with a development history of 50 years, the company fully grasped the opportunity to further increase the R & D and production of electronic components, materials and semiconductor components, continuously optimize the product structure and help the company achieve sustainable development on the basis that the production and sales of optical fiber connector ceramic insert, alumina ceramic substrate and ceramic matrix rank among the top in the world. Seizing the opportunity of domestic substitution, the company has stepped up the R & D and production expansion of high-end MLCC products. In 2021, the company completed a new round of fixed increase, raising and investing in the production expansion project of high-capacity series multilayer chip ceramic capacitors with a monthly production capacity of 25 billion and the construction project of Shenzhen Sanhuan R & D base. After the completion of the project, the company’s MLCC market share is expected to further improve and thicken the company’s core competitiveness.
Profit forecast
It is predicted that the company’s revenue from 2022 to 2024 will be 7.672 billion yuan, 9.814 billion yuan and 12.125 billion yuan respectively, and EPS will be 1.10, 1.33 and 1.64 yuan respectively. The corresponding PE of the current stock price will be 22, 19 and 15 times respectively, giving the “recommended” investment rating.
Risk tips
Risk of falling prices of passive components; Market competition intensifies risks; The downstream demand is lower than the expected risk; The construction progress of the expansion project is less than the expected risk.
