Product: Sina Finance listed Company Research Institute
Author: SXX
Introduction: as China's economic development has entered a new era of paying more attention to quality and innovation, a number of enterprises with "specialization, refinement, characteristics and novelty" have gradually become the birthplace of innovation in our country. The development of the capital market is also keeping pace with the times, and one of the core goals set up by the Beijing Stock Exchange is to serve "specialized and innovative" small and medium-sized enterprises. To this end, Sina Finance launched the "specialized Special New TOP100" series of reports, aimed at tapping a group of small giants who focus on the main business, strong innovation ability, high growth, and focus on market segmentation.
During the reporting period of the semi-annual report in 2021, the military and civilian business orders of Torch Electronics increased rapidly, the income of components in the current period increased significantly, and all indicators increased significantly.
In the first half of 2021, the company achieved a total operating income of 2.412 billion yuan, an increase of 60.92% over the same period last year; the net profit belonging to the shareholders of the parent company was 551 million yuan, an increase of 100.55% over the same period last year; at the same time, due to a significant increase in sales rebates in the current period, the net cash flow from operating activities increased by 122.27%.
Differentiation strategy competition to fill the domestic gap
Torch Electronics is an enterprise specializing in R & D, production, sales and technical support of ceramic capacitors in China. The company is mainly engaged in capacitor and related product research and development, production, sales, testing and service business, its main business includes self-produced business and agency business.
It is worth mentioning that the company and its predecessor have been engaged in capacitor-related business since its inception.The main business has not changed.。
Ceramic capacitors are divided into military and civilian use. In the civilian field, foreign manufacturers occupy most of the market share, and high-end products are in a monopoly position.
Judging from the current competition pattern, most of the well-known foreign ceramic capacitor production enterprises have production bases in China, which occupy a large share of China's civil ceramic capacitor market by virtue of their technology and scale advantages. some high-end products are in a monopoly position. Compared with well-known foreign manufacturers, most of the domestic ceramic capacitor manufacturers are small and medium-sized enterprises, and most of their products are in the medium-and low-grade level.
Based on "specialization and refinement" ceramic capacitors, Torch Electronics adopts a differentiated competition strategy, not only pursuing production capacity and sales, but also taking the "three high" route of high-tech content, high reliability and high added value from the perspective of product performance and quality. it adopts the user structure development strategy of giving priority to the development of military users, focusing on the development of civil industrial users, and selectively supporting civil consumer products.
After years of efforts, the company has passed the strict qualification certification required by the military market, and has become the first batch of domestic enterprises to pass the product certification of "aerospace grade" multilayer ceramic capacitors.It breaks the situation that China's aerospace-grade multilayer ceramic capacitors need to be imported, and fills the domestic gap.。
The products of Torch Electronics have been used in China's manned space engineering carrier rocket project. in 2011, the Chinese Academy of launch vehicle Technology commended the company for its contribution to the successful launch of China's first space docking mission carrier rocket. awarded the "magic arrow" honor to the company. In 2012, the China manned Space Engineering Office commended the company for its contribution to the successful rendezvous and docking mission between Tiangong-1 and Shenzhou-8.
The prosperity of the industry will continue.
Torch Electronics has 7 wholly-owned subsidiaries and 3 holding subsidiaries, forming the three strategic patterns of "components, new materials and trade". It is worth mentioning that the trading business is mainly components for the civilian market.
The main products of Torch Electronics self-produced business include chip multilayer ceramic capacitors (commonly referred to as MLCC in the industry) and lead multilayer ceramics.
Capacitors and multi-core ceramic capacitors, involving five military quality grades, are mainly suitable for aviation, aerospace, ships, weapons, electronic countermeasures and other weapons and equipment military industrial market and some high-end civilian fields.
The agency business is mainly completed through subordinate companies, and the products mainly include AVX tantalum electrolytic capacitors, AVX metal film capacitors, KEMET aluminum electrolytic capacitors, large capacity ceramic capacitors and so on, which are mainly suitable for civil markets such as electric power, rail transit, wind energy, solar energy, automotive electronics, smart phones and so on.
According to the semi-annual report of 2021, the total operating income in the first half of the year was 2.412 billion yuan, of which the sales revenue of self-produced components business totaled 807 million yuan, an increase of 69.18 percent over the same period last year, and the company's trade business revenue reached 1.547 billion yuan, an increase of 58.30 percent over the same period last
During the period from 2017 to 2018, with the adjustment of the production capacity structure of daily factories, there was a gap in the supply of middle and low-end MLCC, the hoarding effect of channels aggravated the situation that the market supply fell short of demand, and MLCC prices rose in the first round. Since then, domestic MLCC enterprises have seized the middle and low-end market share, while the layout of the high-end market.
Over the course of a year, increased inventories have been gradually depleted, and the pace of factory resumption was delayed as a result of the outbreak in early 2020. At the same time, smart phones, 5G and new energy vehicles drive the rapid growth of downstream demand for MLCC, and the prosperity of the industry continues to improve. Major companies around the world have launched plans to build new plants, increase production capacity and promote long-term market expansion.
According to the in-depth report of founder Securities Electronics Industry MLCC, the global MLCC market reached 1 1.7 billion yuan in 2020, is expected to continue to grow to 114.8 billion yuan in 2021, and will exceed 149 billion yuan in 2025.
Share buyback and equity incentive show confidence in development
Torch Electronics has bought back some of the company's shares through centralized bidding transactions with its own funds for three consecutive years, which is used to implement employee stock ownership plans or equity incentives. During the reporting period, the company used 29994479.50 yuan to buy back 560600 shares, with an average repurchase price of 53.50 yuan per share. After the completion of the repurchase, the company held a total of 1953300 shares in the special securities account.
In the same period, the company implemented the 2021 restricted stock incentive to a total of 147directors, executives, core backbones and senior employees with more than 20 years of service in the company (including holding subsidiaries), awarding 826800 shares at a price of 30.00 yuan per share. the sales restriction period is 12 months and 24 months from the date of completion of the grant registration, and the corresponding proportion of lifting the restriction is 50% and 50% respectively.
The deregulation assessment year is from 2021 to 2022, and the company level assessment target: the first sales restriction lifting period shall be based on the operating income in 2021, the growth rate of operating income in 2021 shall be no less than 30%, or the net profit growth rate in 2021 shall be no less than 30%. The second sales restriction period is based on operating income in 2020, the growth rate of operating income in 2022 is not less than 69% or based on net profit in 2020, and the growth rate of net profit in 2022 is not less than 69%.