1H year-on-year turnaround, performance inflection point
The company achieved revenue of 2.569 billion (YoY+13.88%) in the first half of the year, deducting non-return net profit of 57 million (YoY+161.71%), reversing losses over the same period last year, with a gross profit margin of 20.41%, an increase of 2.27pct over the same period last year, and a net profit rate of 2.83%, an increase of 0.78pct over the same period last year. 4Q20/1Q21/1H21 gross profit margin and net profit margin have increased continuously (gross profit margin is 17.80% 19.43%, 20.41%, and net profit is 1.69%, 1.77%, 2.83%, respectively). The company's performance inflection point is emerging. With the development of new business, we expect the company will continue to increase its R & D investment. It is estimated that the company's return net profit for the year 21 / 23 will be 1.62 / 258 million yuan respectively (the previous figure is 170 million yuan in 21 / 22). The company's average Wind for 21 years will be comparable to PE44.25x. Considering the company's leading position in the military PCB field, the company will maintain its target PE of 60.33x in 2021. Maintain the "overweight" rating corresponding to the target price of 14.30 yuan in 2021 (the previous value is 15.29 yuan based on the current equity).
National defense information construction is expected to speed up, military PCB business to expand production to share the economic dividend of the industry, according to Prismark forecast, the global military PCB market compound growth rate of 4% from 2019 to 2023. We believe that military information construction is expected to accelerate during the 14th five-year Plan period, driving the compound growth rate of the domestic military PCB market in the same period is expected to reach 10%. The total scale of 2023 is expected to reach 14.4 billion yuan. Military PCB is required to work stably in complex environment (high temperature, complex electromagnetic environment), so it has high technical barriers and verification barriers. Jesse Technology is a domestic military PCB leader, benefiting from the improvement of the industry, the company is expected to share the industry growth dividend.
The development of new businesses such as 5G small base stations and high-end crystal oscillator is expected to open up growth points for companies to invest in projects such as 5G small base stations and 5G high-end crystal oscillator through non-public offerings, especially the crystal oscillator industry ushered in opportunities for 5G construction and localization of devices, resulting in a substantial increase in demand. In 2020, the company signed a new contract for time-frequency devices worth 368 million yuan, an increase of more than 20% over the same period last year. Among them, constant temperature crystal oscillator grew comprehensively in the special purpose and international market. In the first half of the year, the company expanded its market share and maintained a leading position in the market segment.
In terms of 5G small base stations, we estimate that the domestic market is expected to reach 3.6 billion yuan in 2021, and the company is expected to create new growth points by cutting into the 5G small base station market.
The military and civilian products are booming, the performance is at an initial inflection point, and the "overweight" rating is maintained. we estimate that the company's return net profit for the year 21-23 will be RMB 1.62 million, respectively. (the previous value is RMB 270 million in 21-22). The average Wind of the comparable company in 21 years is PE44.25x, considering the company's leading position in the military PCB field, and maintaining the company's target PE of 60.33x in 2021. Maintain the "overweight" rating corresponding to the target price of 14.30 yuan in 2021 (the previous value is 15.29 yuan based on the current equity).
Risk tips: military PCB business expansion is not as expected; 5G small base station and high-end crystal oscillator research and development is not as expected; accounts receivable impairment risk; the company's traditional business development is not as expected.