Focus on industrial control and other emerging areas, flexible to meet the needs of multi-variety, high-quality customization Yidelong was founded in 2001, mainly for the world with high-quality requirements, demand diversification of customers to provide electronic manufacturing services (EMS), in 2020 in the global EMS manufacturers ranked 81st in revenue, based on differentiated market positioning and leading intelligent production system, the company's per capita income, profit level industry leader. Revenue of 1.289 billion yuan in 2020, of which:
537 million yuan (42.19%) for industrial control, 245 million yuan (19.27%) for communications, and 208 million yuan (16.3%) for medical electronics. At present, the company has established in-depth cooperative relations with more than 260 customers in various industries, such as Stanley Patek, Kangpu, Kohler, Chao, Shanghai Lianyu, POLARIS and so on.
Under the trend of consumption upgrading and localization, the company's differentiation track has long-term growth with reference to the development process of Scanfil, a Finnish manufacturer similar to the company's business model, Scanfil's operating income increased from 181 million euros to 595 million euros at an average annual compound growth rate of 16.04% from 2012 to 2020, and ranked 33rd among global EMS manufacturers in 2020. We believe that with the market expansion driven by the upgrading of domestic consumption, niche markets such as automobiles, industrial control and medical electronics, which were previously relatively high-end for the domestic 3C supply chain, have begun to accelerate localization. This trend has created an excellent foundation for the company's differentiated strategic positioning.
Self-research system to achieve accurate management inside and outside the company, intelligent manufacturing support company growth due to the company's positioning of high-quality, flexible delivery, production involving more than 5000 products and more than 60000 kinds of raw materials, the company independently developed a supply chain management system, including supplier development and management system (SRM), raw material cost control system (MCC) and so on. It is expected that the iteration of the company's QMCS and SAP systems will be completed by the end of 2021, and the new plant built according to the German Industrial 4.0 standard is also expected to be put into production by the end of this year. We believe that the landing of the world's leading intelligent manufacturing software and hardware will help support the company's long-term business growth and achieve the target of 50-70 new customers a year.
Target price 52.19-53.41 yuan, maintain the "buy" rating
We expect the company's annual homing net profit in 21-22-23 to increase by 52.3%, 38.2%, 33.8% to 3.49466 million yuan, compared with the same period last year. Combining absolute valuation and relative valuation, we believe that the value of the company's stock is between 52.19 and 53.41 yuan, with a premium of 32.35% 35.46% over the current share price, maintaining the "buy" rating.
Risk tips: demand is not as expected; capacity release is not as expected; customer development is not as expected.
