\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 36 Guang Dong Fenghua Advanced Technology (Holding) Co.Ltd(000636) )
Core view
In 21 years, the revenue increased by 16.7% year-on-year, and the net profit attributable to the parent increased by 162.9% year-on-year. The company's 21-year revenue was 5.055 billion yuan (YoY + 16.7%), and the net profit attributable to the parent company was 943 million yuan (YoY + 162.9%), and the net profit attributable to the parent company after deduction was 778 million yuan (YoY + 80.2%). Non recurring profit and loss increased by 238 million yuan year-on-year in 21 years, mainly due to: 1) the company accrued 91 million yuan of goodwill impairment for naidian in 20 years; 2) In the year of 21, naidian and Fenghua Research Institute issued statements, and the investment income increased by 75 million yuan year-on-year; 3) The income from the collection and storage of land and ancillary buildings increased by 51 million yuan in 21 years. The high growth of non deduction performance in 21 years is due to: 1) the rapid increase of production capacity of MLCC, resistance and other products, and the increased demand for passive components in 5g, new infrastructure and other markets in the first three quarters of 21 years; 2) The company's gross profit margin in 21 years increased by 2.26pct to 31.91% year-on-year. 1q22 revenue decreased by 6.1% year-on-year, and net profit attributable to parent decreased by 3.2% year-on-year. Since 4q21, affected by factors such as lack of core, repeated covid-19 epidemic and blocked logistics and transportation, the terminal demand is weak, the volume and price of passive components industry have fallen together, and the sales volume and price of the company's products have decreased month on month. In this context, the company's 4q21 revenue is 1.100 billion yuan (YoY - 22.1%), and the gross profit margin is 26.37% (QoQ - 8.40pct, yoy - 2.62pct); 1q22's revenue was 1.102 billion yuan (YoY - 6.1%), the net profit attributable to the parent company was 180 million yuan (YoY - 3.2%), and the gross profit margin was 8.58% (QoQ - 1.38pct, yoy - 5.38pct). 1q22's performance fell slightly year-on-year.
The company accelerated its production expansion projects and continued to pay attention to R & D investment. Phase I of the company's Xianghe Industrial Park high-end capacitor project reached production at the end of 21, with a new MLCC monthly production capacity of 5 billion. Phases II and III are being promoted as planned. By the end of April 22, the company had added 28 billion chip resistors per month, and the technological transformation and expansion project had achieved 15 billion new capacity per month. In the past 21 years, the company invested 295 million yuan in R & D (YoY + 28.04%), and the R & D expense rate was 5.83% (YoY + 0.52pct). In recent five years, more than 2000 high-end resistance and capacitance products of the company have passed the certification of strategic customers, becoming the company with the largest variety of products certified by strategic customers in China.
2q22 passive component destocking is coming to an end, and the industry is expected to usher in an upward turning point. According to the report of mantianxin on April 7, qinkai, a large manufacturer of passive component materials, said that according to the current order receiving situation, the pulling strength of capacitors, inductors and resistors has gradually picked up, the demand for replenishment of inventory in the terminal market has emerged one after another, and the upward inflection point of the boom of passive components is approaching. In addition, Guoju said that it would not rule out raising the quotation to reflect the rise in transportation and production costs. At present, the demand for niche products is booming, the order shipment ratio remains above 1, and the general products are still in inventory correction, but the orders have increased, and the market is bottoming out. In the long run, under the background of strong market demand for 5g and automotive electronics and the acceleration of MLCC domestic substitution process by Sino US trade friction, we are optimistic that the company will quickly seize market share and realize high-end upgrading of products through production expansion based on strong R & D strength.
Investment suggestion: we expect the company's operating revenue to increase by 18.3% / 36.9% / 28.5% year-on-year to 59.79/81.86/10.518 billion yuan in 22-24 years, and the net profit attributable to the parent company to increase by 13.8% / 45.8% / 30.1% year-on-year to 10.73/15.65/2.035 billion yuan, corresponding to 17.8/12.2/9.4 times of PE, maintaining the "buy" rating.
Risk warning: the terminal demand is less than expected; Capacity expansion is less than expected; Industry competition intensifies.
