Event: in the first three quarters of 2021, the company achieved operating income of 2.622 billion yuan, an increase of 31.38% over the same period last year, and a net profit of 205 million yuan, an increase of 30.67% over the same period last year, deducting 187 million yuan of non-return net profit, an increase of 34.43% over the same period last year.
Of this total, the operating income in the third quarter was 976 million yuan, an increase of 40.90% over the same period last year, and the net profit was 52 million yuan, an increase of 64.52% over the same period last year.
The enhanced layout of a number of products has a short-term impact on gross profit margin and period expense rate, waiting for it to blossom and bear fruit. In the third quarter, the company strengthened the process and capacity layout in many products, such as new energy vehicle PCB board, control board, embedded parts, etc., which to a certain extent affected the company's single-quarter gross profit margin and the rate of managing R & D expenses, but also laid a solid foundation for the growth of the fourth quarter and next year. In the follow-up, as the layout of the third quarter began to contribute revenue and profits to the company. Superimposed cost reduction and efficiency measures continue to be implemented, product structure optimization, one-stop service model is further promoted, the company's performance growth flexibility is expected to be enhanced.
Vehicle high-power PCB layout industry leading, is ushering in the industry explosion period. Since 2007, the company has been actively laying out automotive electronic and electrical systems and automotive electronic control system PCB products, and then focusing on the layout of intelligent connection solutions and comprehensive solutions for new energy vehicles, committed to solving high-density intelligent printed circuit boards and reliability problems for customers, helping the three electric systems to achieve high integration, structure and modularization. At the same time, through the acquisition of Juntian Hengxun, the company has cut into the field of high-power vehicle components and control modules, thus mastering the ability to provide modular and customized electronic circuit solutions for new energy customers. Automobile companies are more cautious in the verification and introduction of upstream parts, especially those related to safety, such as the three electricity system. Therefore, after the company achieves a breakthrough in this field, high verification difficulty and long verification cycle will become the company's natural competition barrier. At a time when the new energy vehicle industry is about to break out, the value of the company's past layout will be gradually reflected, and the company's automotive electronics revenue share has risen to more than 25%. Further growth is expected in the future.
The prototype of one-stop service provider of "PCB+ components + solution" 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.
HDI production capacity continues to expand, benefiting from 5G mobile phones, mini LED and other new applications. The second-order and above HDI is another key business of the company. Since the company broke through the second-level technology and turned losses into profits in 2017, the company has continuously expanded its production capacity and improved the yield and overall yield of the HDI production line.
From the perspective of downstream demand, the penetration of economical 5G smartphones is constantly increasing the demand for second-and third-order HDI; second-and third-order HDI is the backplane choice of the current mini LED COB scheme.
On the whole, as one of the few domestic enterprises that break through the second-order technology, it is expected to gain considerable domestic market share.
Profit forecast and investment rating: maintain buy rating. In recent years, the company has continuously won new customer orders in HDI main business and vehicle PCB related fields, and through its sub-divisions, the business field has been extended to many fields such as electric control board, integrated embedded PCB, power semiconductor substrate and so on. The solution business group is gradually on the right track, and it is expected to form a good situation in many fields in the future, and it has been clearly supported by many core customers downstream at the product end. Obviously, the length and depth of the industrial chain is an important point that distinguishes Bomin from other traditional PCB companies. We expect the company's performance in 2020-2022 to be 325 million, 460 million and 584 million, respectively. The current share price corresponds to 23.56,16.58 and 13.07 times PE, maintaining the buy rating.
Risk hints: (1) Jiangsu Bomin production capacity growth rate is not as expected; (2) domestic car electronic rate and on-board PCB promotion progress is not as expected; (3) new customer expansion is not as expected.