\u3000\u3000 Suzhou Recodeal Interconnect System Co.Ltd(688800) (688800)
Announcement summary: the company released the performance forecast for 2021. It is expected to realize the net profit attributable to the parent company of 115 million yuan in 2021, with a year-on-year increase of about 56.39%, and deduct the net profit not attributable to the parent company of 98.7186 million yuan, with a year-on-year increase of about 49.01%.
The performance was in line with expectations. The inflection point was confirmed in the third quarter and increased significantly in the fourth quarter. In a single quarter, the company had a performance inflection point from 2021q3, and the net profit attributable to the parent company in 2021q4 was 43.6457 million yuan, a significant increase of 262.17% year-on-year and 25.44% month on month. The performance growth is mainly due to the increase of sales orders of new energy vehicle connectors. It is expected that the annual revenue of new energy vehicle business is expected to more than double, accounting for more than 70%, becoming the main source of profit of the company. The revenue of communication business has decreased due to the slowdown of 5g construction and the increase of 700m base station. The rise in the price of raw materials in the first half of the year affected the profit margin of the company. After negotiating with customers, the price of some customers’ products was increased. At the same time, under good cost control and economies of scale, the gross profit margin and net profit margin in the third quarter were significantly improved. In terms of products, according to the announcement, in addition to high voltage and high current products and power exchange products, the company focuses on the field of ADAS and intelligent driving. Relevant on-board connectors such as fakra, mini fakra, Ethernet connection, high-speed board to board connector, etc. have completed product development and have carried out cooperation with some customers
As a leading manufacturer of automotive high-voltage connectors, high-frequency and high-speed connector products are expected to make a breakthrough. The company entered the field of new energy vehicles earlier, and has the R & D and production capacity of optical, electrical and microwave connectors, forming a complete product chain supply system including connecting devices, components and modules. The technical capacity and industrial status of the company’s high-voltage connector are in the first echelon in China. The power exchange business of new energy vehicles is prospectively arranged. The power exchange connector technology is combined with the floating tolerance technology of connector products to prolong the plug-in life of the connector. At the same time, when the service life of the connector reaches the limit, it can be replaced in time through simple operation, greatly reducing the maintenance difficulty and cost. The company is the main supplier of the industry leader Weilai automobile power exchange connector components, and began to carry out the research and development of power exchange products for great wall, SAIC, JAC, Contemporary Amperex Technology Co.Limited(300750) and so on at the same time, fully benefiting from the growth of demand in the power exchange industry. The company complies with the trend of automotive intelligence, relies on the technical accumulation of RF connectors in communication base stations, and actively arranges the high-value vehicle high-frequency and high-speed connector business, which is expected to form the incremental income of automotive connector business. At the same time, the company has the ability of rapid customer response. It is one of the few providers in the industry with comprehensive solutions for communication and new energy connection systems at the same time. It can formulate comprehensive solutions for connection systems according to customer industry characteristics, personalized needs, final product parameters, functional requirements and other aspects to improve customer stickiness.
Electrification + intellectualization + localization, opening up the connector market space. The electrification of vehicles has increased the demand for high-voltage connectors. The value of single vehicle connectors is 3000-10000 yuan, which has doubled compared with traditional fuel vehicles. At the energy supplement end, several mainstream vehicle manufacturers plan to launch electric vehicle replacement. Driven by the policies such as the pilot work of power replacement carried out by the Ministry of industry and information technology, the electric connector replacement is expected to become the industry standard, which is conducive to the later battery upgrading, maintenance and recycling. At present, the single vehicle price range of electric connector replacement for passenger vehicles and commercial vehicles is 500-1200 yuan and 2500-3000 yuan respectively, The power exchange scheme will greatly increase the overall market scale of electric vehicle connectors. Automotive intelligence brings incremental demand for high-frequency and high-speed connectors, benefiting from the improvement of automatic driving penetration and the upgrading of automotive EE architecture, and the application expansion of data high-speed transmission system. Vehicle high-frequency and high-speed connectors such as fakra, mini fakra, HSD and vehicle Ethernet connectors have become mainstream solutions, which are applied to cameras, sensors, Bluetooth, navigation and driving assistance systems, The consumption and value of single vehicles have increased significantly. Automotive connectors have long been dominated by European, American and Japanese enterprises, with Tyco, Amphenol and Molex in the top three. However, in recent years, Chinese connector manufacturers have broken through customer barriers by taking advantage of the rise of independent brand car enterprises in the field of new energy vehicles, relying on the eastward shift of electronic manufacturing capacity and their advantages in price, quality, cost and supply capacity, We will increase market share in the field of new energy vehicles and accelerate domestic substitution.
Investment suggestion: Suzhou Recodeal Interconnect System Co.Ltd(688800) is the leader of China’s 5g base station RF and new energy vehicle high-voltage connector. It is prospectively arranged in the field of new energy vehicle power exchange and on-board high-speed and high-frequency connector. The performance inflection point appears in 2021q3, with broad growth space. We expect the net profit of the company from 2021 to 2023 to be 117 million / 189 million / 293 million respectively, and EPS to be 108 yuan / 1.75 yuan / 2.71 yuan respectively, maintaining the “buy” rating.
Risk warning: risk of price rise of main raw materials; Lower than expected risks in downstream industries; Technical iteration risk; The risk of intensified competition in the new energy vehicle industry; The public data used in the research report may have the risk of information lag or untimely update.
