\u3000\u3 Guocheng Mining Co.Ltd(000688) 700 Kunshan Dongwei Technology Co.Ltd(688700) )
The company released the first quarterly report of 2022. In the first quarter, the operating revenue was 195 million yuan, a year-on-year increase of 20.59%; The net profit attributable to the parent company was 39 million yuan, a year-on-year increase of 47.86%; Net profit deducted from non parent company was 36 million yuan, with a year-on-year increase of 39.40%.
Key points supporting rating
In the first quarter, the revenue and profit continued to maintain rapid growth, and the profitability was further improved. In the first quarter of 2022, the company continued the growth trend since last year and realized an operating revenue of 195 million yuan, a year-on-year increase of 20.59%; The net profit attributable to the parent company was 39 million yuan, a year-on-year increase of 47.86%. In terms of profitability, the gross profit margin in the first quarter was 43.59%, an increase of 1.34 PCT year-on-year; The net interest rate was 20.25%, with a year-on-year increase of 3.73pct, which fully demonstrated the company’s bargaining power and cost control ability.
There are sufficient orders on hand to support future performance growth, the PCB industry continues to boom, and the demand for VCP equipment is highly uncertain. By the end of the first quarter, the company’s contractual liabilities were 230 million yuan, an increase of 15 million yuan over the end of 2021, indicating that the company has full orders on hand, laying a good foundation for this year’s performance growth. According to prismark’s prediction, benefiting from the improvement of 5g penetration and the expansion of intelligent device application scenarios, the output value of PCB will reach US $86.33 billion in 2025, with a compound annual growth rate of 5.8%. According to the data of printed circuit information and CPCA, it is estimated that the market scale of China’s vertical continuous electroplating equipment will reach 4.105 billion yuan by 2025. As the leader of vertical continuous electroplating equipment, the company will fully benefit from the growth of demand for vertical continuous electroplating equipment in the future.
The demand for PET composite copper foil is ready, and Dongwei pet copper plating equipment has obvious first mover advantage. Contemporary Amperex Technology Co.Limited(300750) the leading manufacturer of power battery released a new multi-functional composite fluid collector technology at the 2021 world new energy vehicle conference. Compared with the traditional fluid collector, PET composite aluminum foil and copper foil have the advantages of high safety, high specific capacity, long service life and strong compatibility. They can completely solve the industry problem of heating out of control caused by internal short circuit, and effectively improve the battery capacity. They have broad application prospects in the future. At present, according to the Kunshan Dongwei Technology Co.Ltd(688700) annual report, the rolled horizontal sectord copper wire and the conductive ultra-thin rolled horizontal coated wire of bilateral fixture have met the requirements and technical conditions of mass production, and have obvious first mover advantages. In the future, with the gradual increase of the penetration rate of PET composite copper foil in power and energy storage batteries, according to our calculation, pet copper plating equipment will have a market space of 4-5 billion yuan in 2025.
Valuation
Maintain the company’s profit forecast from 2022 to 2024, and it is expected to achieve a revenue of RMB 1.234/16.13/2.077 billion and a net profit of RMB 240/3.19/431 million. Under the background of the continuous prosperity of PCB industry and the large demand for pet copper plating equipment, the company, as the leading company of vertical continuous plating equipment, will fully benefit and maintain the buy rating.
Main risks of rating
The prosperity of PCB industry is lower than expected; The promotion of PET composite copper foil was not as expected; Industry competition intensifies.
