Q3 performance increased steadily, main business profitability continued to improve 2021Q1-Q3 cumulative: operating income 9.316 billion yuan (year-on-year + 79.32%), home net profit 262 million yuan (year-on-year + 48.96%), of which the main wire and cable, electromagnetic wire plate achieved net profit of 368 million yuan, an increase of 71.25% over the same period last year, cold chain plate loss of 67 million yuan, mainly due to the decline in pork prices The company sets aside 51 million yuan for inventory price reduction. Q3 in 2021: operating income 3.673 billion yuan (year-on-year + 58.50% / month-on-month + 11.74%), gross profit 13.31% (year-on-year-0.32pct/-0.47pct), net profit 97 million yuan (year-on-year-1.03% / month-on-month-8.49%), of which wire and cable, electromagnetic wire plate achieved a net profit of 157 million yuan. The company's product sales continue to expand: we estimate that from the first three quarters of 2021, the copper price increased by about 44% compared with the same period last year. Combined with the growth rate of operating income, the overall production and sales growth rate of the company is about 25%, which is higher than that of the industry as a whole. And deducting the impact of asset impairment losses, the company's profitability continues to improve. We maintain our previous forecast that the company's 2021-2023 net return is expected to be $594 million for 2021 and $0.91 million for EPS, respectively, and the current share price is 10.6 times for PE, maintaining a "buy" rating.
Production expansion is just around the corner, and the flat line business is expected to be greatly expanded.
Supply: the company's new production capacity is expected to be put into production by the end of 2021, when the production capacity will reach 7000 tons / year, about three times the current capacity. The company simultaneously expands the production capacity of copper rod to defend the cost advantage of raw materials and ensure the supply of raw materials. Demand: (1) customer expansion is smooth, the company's main mass production customers are Suzhou Huichuan, Bogwarner and Shanghai United Microelectronics Corp, Jingjin Electric, etc., terminal car companies include SAIC, Great Wall, Guangzhou Automobile and other domestic first-tier new energy manufacturers. At present, the company is in the stage of sending samples to BYD, which is progressing smoothly and is expected to supply BYD in bulk in 2022. (2) the permeability of flat line motor continues to increase, not only high-end models, but also medium-and low-end new energy vehicles gradually adopt flat line motor.
The product technology remains in the lead, and it is expected to overtake the domestic flat wire in the corner under the trend of high voltage of the motor. at present, the basic enamelled flat wire is the mainstream, on the basis of which the Golden Cup electrician develops two kinds of insulation structures: enamelled bag + film package and enamelled bag + pack. At present, the motor is in the transition from 400V to 800V. For example, BYD e platform 3.0 is based on 800V architecture. The insulation mode of enamelled + film and enamelled + pack has better resistance to high voltage, high temperature and aging than traditional enamelled wire, which is helpful for the company to expand its market share under the high voltage wave of motor.
Risk tips: upstream raw material price fluctuations; flat line motor permeability is lower than expected; industry competition intensifies