This report is read as follows:
The company's production capacity will be expanded by 2.64 times in the next five years. 5G, new energy promotes high fundamental frequency and car gauge crystal oscillator. The company will fully benefit from the volume and price increase brought about by the domestic replacement of high-end crystal oscillator.
Main points of investment:
The target price is 22.34 yuan, covering it for the first time and increasing its rating. It is estimated that the company's operating income from 2021 to 2023 will be RMB 7.31 million, an increase of 88.48%, 43.07%, 25.89%, and net profit of RMB 1.64, 180, 262 million, an increase of 711%, 10%, 46%, and a corresponding EPS of 0.59, 0.64, 0.94, respectively. Comprehensive relative and absolute valuation method, give the company the target price of 22.34 yuan.
The planned capacity of the company's Chongqing project will be expanded by 2.64 times, and it is expected to fully benefit from the domestic replacement of high-end crystal oscillator in the transfer of the global crystal oscillator industry. The company's products have been certified by Qualcomm Inc, and when the lithography process and raw materials are similar to the head manufacturers, the time is ripe for domestic replacement of high-end crystal oscillator. The company actively expanded its production capacity and built a production base in Chongqing in 2020, with an original capacity of about 1 billion pieces per year. After all the Chongqing projects reached production, the production capacity can be increased by 2.64 billion pieces per year, ranking in the forefront of the country. The first phase of the project has been put into production in the second half of 2021, with a total production capacity of 17.1 billion, and the company's crystal oscillator production and sales will be greatly increased in 2022.
High fundamental frequency and car gauge crystal oscillator bring both volume and price increases for the company: 1) 5G construction promotes the rapid growth of market demand for high fundamental frequency crystal oscillator, the company's 76.8MHz high fundamental frequency products have obtained Qualcomm Inc certification and are expected to supply to many brands of mobile phone manufacturers around the world; at the same time, the average price and gross profit margin of high fundamental frequency crystal oscillator products are higher, which is expected to further enhance the company's profitability. (2) the demand for crystal oscillator of new energy electric vehicles is about 100fu 150, which is significantly higher than that of traditional cars 60 per cent. at the same time, the demand for crystal oscillator of vehicle specification is higher than that of ordinary crystal oscillator, which will bring new profit growth points for the company.
Catalysts: 1) Qualcomm Inc 76.8MHz 's 5G plan landed and released; 2) the car gauge crystal oscillator was successfully introduced to domestic automakers.
Risk tips: 1) the downstream market demand of quartz crystal oscillator is lower than expected; 2) the domestic substitution process is not as expected; 3) the price of high-end crystal oscillator is declining.
