Professional functional device manufacturers with rapid growth since its inception
Professional functional device manufacturers, mainly engaged in the research and development, production and sales of functional devices, products are electronic products functional devices, fixtures and automation equipment, mainly used in consumer electronics and automotive electronics two major fields.
The company's customer resources are high-quality, and the direct customers are mainly terminal brand upstream manufacturing service providers and component manufacturers, including Foxconn, BYD, Gore shares, ultrasonic electronics, Xinli Optoelectronics, Qiu Titanium Technology, etc., and the products are finally used in consumer electronics brands such as Apple Inc, Huawei, XIAOMI, OPPO, VIVO, as well as Audi, Volkswagen and other automotive brands. The performance of the company has grown rapidly since its inception, with a revenue CAGR of 34.65% and a net profit of 34% from 2016 to 2020, showing a trend of rapid growth. The revenue of 21H1 company is 300 million yuan, and the net profit of yoy+54.4%, is 89.3 million yuan, yoy+186.88%.
Successful introduction of industry-leading customers, excellent profit quality, long-term benefit from customer expansion + capacity expansion functional devices have the characteristics of strong customized attributes, fast product update, significant scale advantage and strong customer stickiness, with many domestic and foreign participants. fierce competition. The company's products were successfully introduced into the global contract manufacturing leader Foxconn, and its sales revenue to Foxconn showed an overall growth trend. From 2017 to 2020, the company's sales revenue to Foxconn was 24.9%, and its contribution to the company's revenue was 76%, 84%, 54% and 61%, respectively. The company has an industry-leading ROE level and excellent profit quality. Relying on high-quality customers to open brand influence, product power + brand power to support the company's customer progress has achieved remarkable results, the new Ofeiguang, Qiu titanium technology, Flextronics and other customers, the business scale continues to grow. The company's IPO project further expand the company's production capacity and improve product quality. Capacity release supply capacity to enhance superimposed customer expansion, the company's long-term performance growth flexibility.
Wearable device + Automotive Electronic degree deepens to further enhance the demand for functional devices Android TWS+ smartwatch drives the continuous expansion of the wearable market. Benefit from the improvement of binaural interconnection + gradual improvement of the supply chain cost probe + compared with the low matching rate of airpods Android TWS, Android TWS takes over Airpods to promote the sustained high growth of TWS. Smartwatches are expected to replicate the TWS growth path and continue to grow at a high speed. Giants such as Huawei Apple Inc have joined the game to expand smartwatch medical-grade applications, which is expected to further expand the wearable target population and enhance the demand ceiling.
The electric transformation of the automobile, the improvement of ADAS and the permeability of the intelligent cockpit lead to the deepening of the electronic degree of the automobile and the increase of the bicycle value of functional devices. The penetration rate of 2021Q1 new energy vehicles is 5.8%, which is higher than that of the whole year of 2020 by 1.8pct. The growth momentum continues to reach an all-time high. Policy guidance + the launch of new models will continue to be good for cars to accelerate the electrification transformation. Consumption upgrade superimposed cost down, ADAS and smart cockpit permeability to improve the space. Automotive electronics accounts for an increasing share of vehicle manufacturing costs, which is expected to be close to 50% in 2030, further driving the increase in the value of bicycle functional devices.
Investment suggestion: in 21-22-23, the company's annual revenue is estimated to be 1.421 billion yuan, net profit is 249 million yuan, and the corresponding EPS is 5.64 yuan per share, corresponding to 3.12 pounds per share, which values the company 25 times for 22 years and corresponds to the 22-year target price of 108 yuan per share. For the first time, coverage gives "buy" rating risk hints: downstream demand is lower than expected, customer expansion is not as expected, capacity release is not as expected, market competition aggravates the loss of corporate share and declining profitability.