\u3000\u3 China Vanke Co.Ltd(000002) 384 Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) )
The company’s performance grew steadily and achieved remarkable results in reducing costs and increasing efficiency. In 2021, the company achieved an operating revenue of 31.8 billion yuan, a year-on-year increase of 13%, and a net profit attributable to the parent company of 1.86 billion yuan, a year-on-year increase of 22%; Net profit after deduction of non return to parent company was 1.58 billion yuan, with a year-on-year increase of 21%. At the same time, the company carried out in-depth benchmarking management, cost reduction and efficiency increase, which played a positive role in the performance. The expense rate of the company during the 21-year period was 4.9%, a year-on-year decrease of 0.9pct. In 22q1, the company achieved a revenue of 7.3 billion yuan, a slight decrease of 3% year-on-year, and the net profit attributable to the parent company was 360 million yuan, a year-on-year increase of 49%. The substantial increase in profits mainly benefited from 1) the further optimization of the company’s product structure and the significant increase in new energy business income; 2) the continuous promotion of cost reduction and efficiency increase, with remarkable results.
Main businesses go hand in hand and actively expand the breadth and depth of customers. In 2021, the company’s electronic circuit business achieved a revenue of 20.5 billion yuan, a year-on-year increase of 9.2%. According to prismark’s estimate of the revenue of global PCB enterprises, the company ranked third in the world in 21 years. In terms of FPC soft board, mflex maintains in-depth cooperation with core customers. Compared with Japanese and Korean suppliers, mflex has more cost and other advantages, and its share is expected to continue to increase. At the same time, the company has actively promoted the expansion of emerging businesses such as AR / VR and new energy, and the main business indicators have achieved steady growth. It is expected to benefit from the launch of AR / VR products for key customers in the future. In terms of hard board, multek actively overcame the adverse effects of periodic power rationing and rising prices of raw materials, and achieved breakthrough business results through resource integration and improving management ability. The company has increased the breadth and depth of new energy vehicle customer development. In addition to North American customers, Chinese customers have also successfully realized supply.
The emerging market of new energy vehicles has sufficient medium and long-term growth momentum. According to our calculation, the Global Automotive PCB market will be about 50.9 billion yuan in 21 years, and will exceed 90 billion yuan in 25 years, with a growth rate of 21-25 ecagr16%, far exceeding the overall PCB market. The company has served new energy vehicle customers for many years. With the advantages accumulated in the field of electronic circuits and precision manufacturing, the company has formed sufficient technology, products and talent reserves. In 21 years, the revenue of the company’s energy vehicle industry increased by 120% year-on-year. In addition, the development of products such as precision structural parts and intelligent touch display of the company’s new energy vehicles is expected to promote the continuous growth of the company’s automobile business in coordination with the electronic circuit business. The company has provided lightweight aluminum alloy functional structural parts and other products for well-known automobile customers in the industry. In the future, the advantages of multi industry chain and integration are expected to further deepen the adhesion between the company and customers.
Profit forecast and investment suggestions
We predict that the company’s earnings per share for 22-24 years will be 1.36 yuan, 1.69 yuan and 2.07 yuan respectively (the original forecast for 22-23 years is 1.42 yuan and 1.71 yuan respectively, mainly reducing the gross profit margin forecast). According to the 22-year 19 times PE valuation level of comparable companies, the corresponding target price is 25.90 yuan, maintaining the buy rating.
Risk tips
The epidemic situation affects the operation risk of the company; Risk of demand falling short of expectation; PCB gross profit margin fluctuation risk.
