Event: in the first half of 2021, the company achieved operating income of 1.646 billion yuan, an increase of 26.32% over the same period last year, and net profit of 153 million yuan, an increase of 22.12% over the same period last year, deducting 141 million yuan of non-return net profit, an increase of 27.25% over the same period last year.
It is commendable that the gross profit margin has risen steadily, and the marginal impact of the rise in raw material prices in the second half of the year has weakened. In the first half of the year, the company's overall gross profit margin was 20.55%, an increase of 0.2 pct., compared with the same period in 2010. in the first half of the year, the prices of copper foil, resin, fiberglass cloth and other raw materials continued to rise (including CCL prices rose by about 30% in the last half of the year), but most downstream terminals generally do not accept price transfer, the steady increase in gross profit margin is quite commendable. It reflects: (1) the benefit of Cost Down and six Sigma projects to reduce cost and increase efficiency. (2) PCB product structure optimization, HDI and vehicle PCB revenue share increase; (3) one-stop service model positively promotes the added value of the company's products. From 2018 to 2020, the revenue share of the company's solution business continues to increase, and the gross profit margin of this business is 10 pct higher than that of PCB. Above. At present, the rising trend of various raw material prices is beginning to slow down, and the company's overall profitability in the second half of the year is expected to usher in a
HDI and vehicle PCB continue to increase capital and production to enhance core competitiveness. The second-order and above HDI and on-board PCB are the focus of the company in the field of PCB in the past two years. During the reporting period, the two aspects gradually entered the harvest period:
(1) in terms of HDI, with the breakthrough of second-order technology in 2017, the yield and yield of Jiangsu Bomin HDI production line continued to climb, 5G pre-penetration cycle, the accelerated penetration of domestic economical 5G mobile phones increased the demand for second-and third-order HDI, benefiting from this, Jiangsu Bomin had sufficient orders in the first half of the year, with a net profit of 60.6536 million yuan, an increase of 108.27% compared with the same period last year, basically flat with the commissioning of new production capacity. Profits contributed by the company's HDI are expected to continue to rise. It is worth noting that the second-order and third-order HDI is the backplane choice of the current mini LED COB scheme. As an enterprise with a small number of domestic capital and has broken through the second-order technology, the company is expected to become an important participant.
(2) the company has a layout in the field of automotive electronic and electrical systems and automotive electronic control systems, especially in the connection of the three-electric intelligent system of new energy vehicles. The company has solved the two technical problems of high-density intelligent control printing and reliability for automotive electronics, which can help customers to achieve high integration, structure and modularization of the three-electricity system. During the reporting period, the proportion of the company's automotive electronic revenue has increased to 25%. With the rapid and healthy development of the domestic new energy vehicle industry, the company's automotive electronics revenue is expected to continue to grow.
On the whole, in terms of PCB, the company has a sound product structure system, and the downstream structure is being continuously optimized. Currently, a "high-precision multi-layer rigid-flex PCB industrialization project" is being built in Bomin, Jiangsu Province. With the release of new production capacity, the company's core competitiveness will be further enhanced.
The prototype of "PCB+ components + solution" one-stop service provider has emerged. In recent years, based on PCB, the company continues to extend to the upper and lower reaches of the industrial chain through both endogenous and epitaxial methods. At present, Juntian Hengxun, Bosmin, Yu Licheng, Art sense and Microcore Division have been formally integrated into the group management system for overall management, and can provide customers with services such as component procurement and production, solutions, PCB patching and testing, which has formed a good synergy with the PCB business group. The revenue growth contributed by the solution business over the past few years is quite clear, and the future will continue to focus on home appliances, aerospace, new energy vehicles and other areas to strengthen competitive advantage.
Small non-reduction does not need excessive interpretation, and the company's ownership structure is expected to be optimized. The company shares held by shareholders Gongqingcheng Haoxiang were acquired when it was acquired by Juntian Hengxun in 2019. By August 13, 2021, the total shares held by Gongqingcheng Haoxiang and concerted actors have dropped to 5%. The reduction of Gongqingcheng Haoxiang is not directly related to the fundamentals of the company and the performance of Juntian Hengxun. Juntian Hengxun has fulfilled its performance promise at the time of acquisition and has been successfully integrated into the group system. Form a good synergy with other businesses, the management and technical team is stable, and it is expected to continue to generate revenue for the company in the future. In addition, the decline in the shareholding proportion of Gongqingcheng Haoxiang is not a bad thing for the company to improve its ownership structure, so there is no need to over-interpret the withdrawal of Gongqingcheng Haoxiang.
Profit forecast and investment rating: maintain buy rating. The continuous gains in HDI and in-car PCB are the core drivers of the company's growth, and the solution business group is gradually on the right track, which is expected to provide a new driving force for the company's growth. In the case of two-wheel drive, we expect the company's 2020-2022 results to be 345 million, 460 million and 584 million, respectively, with a current share price of 20.81,15.61,12.31 times PE, maintaining a buy rating.
Risk hints: (1) Jiangsu Bomin production capacity growth rate is not as expected; (2) domestic car electronic rate and on-board PCB progress is not as expected; (3) new customer expansion is not as expected; (4) Juntian Hengxun integration effect is not as expected.
