occurrences
Yi Delong released its 2021 annual report: In 2021, the company achieved revenue of 1,752 million yuan, an increase of 35.88% over the previous year; achieved net profit of 227 million yuan, an increase of 37.33% over the previous year; and achieved net profit of 210 million yuan after deduction, an increase of 45.43% over the previous year.
Key points of investment
Various line businesses are growing steadily, and refined management helps profitability
Strength improvement
In 2021, in the face of a global chip supply shortage, the company actively adopted various tracking measures and prepared raw materials to meet customer needs to the greatest extent possible and achieve steady and rapid growth in various businesses. Specifically, in 2021, production and sales of the company's five main businesses all increased by more than 30% compared to the same period last year, and production and sales of consumer and automotive products grew higher than 70%. The revenue of industrial control, medical and communication products was 729, 331 and 307 million yuan respectively, accounting for 41.66%, 18.88% and 17.55% of revenue, which were the main sources of revenue from the main business. Revenue from medical and industrial control products grew rapidly, up 59.21% and 35.68% year-on-year from 2020. In terms of profitability, the company achieved gross margin of 27.79% in 2021, an increase of 1.57% over the previous year. Among them, the gross margin of telecommunications, consumer electronics, medical and automotive products increased slightly, while the gross margin of industrial control products declined slightly, mainly affected by rising raw material prices and the need to improve the yield of newly developed products. In terms of expenses, the company continued to improve its fine management capabilities in 2021. The company's sales, management and financial expenses rates were 1.54%, 4.70%, and -0.06% respectively, and the overall cost rate was well controlled.
Differentiation strategy creates platform advantages and continuously explores high-quality customers in global market segments
Under the trend of specialized division of labor in the global electronics industry, the market capacity of the global EMS industry is gradually expanding. According to statistics from New Venture Research, the global EMS industry market reached 594.7 billion US dollars in 2020, and is expected to reach 8383 billion US dollars by 2025. Diversified applications are driving rapid market growth. The company is deeply involved in the EMS industry and is positioned as a leading enterprise in small-batch and multi-category demand segments. In 2021, the company has established cooperative relationships with more than 270 customers in various industry segments, including Stanley, Komp, Kohler, Wave, Shanghai Lianying, CE+T, and POLARIS. The products cover the five major application fields of industrial control, communications, medical care, consumer electronics, and automotive electronics, and will continue to benefit from the increase in supply share among major customers in the future.
At the same time, the company continues to explore new customers and lay out the fields of big data, 5G Internet, autonomous driving, and new energy, laying the foundation for subsequent rapid development. Furthermore, the company is actively promoting the expansion of the company's production capacity layout. The first phase of the company's phase II plant of more than 50,000 square meters is expected to be put into use in July 2022. After the total 170,000 square meters of the first and second stages are put into use, it is estimated that the output value corresponding to the total production capacity will reach 10 billion yuan. In 2022, the company plans to build a smart factory for high-end electronics manufacturing, which will have an annual production capacity of 110 million pieces of high-end electronic intelligent control components such as automotive electronics and medical electronics.
We believe that as a leading enterprise in flexible manufacturing, the company is deeply involved in the EMS market. In the context of the shift of the global electronics manufacturing service industry to China, the company is expected to achieve long-term growth through a “small batch, multi-variety” customized strategy and continuous exploration of high-quality customers.
Profit forecasts
It is predicted that the company's revenue for 2022-2024 will be 2,2983 billion yuan, and 3.787 billion yuan respectively, and the EPS will be 1.95, 2.45, and 2.98 yuan respectively. The current stock price corresponding to PE is 17, 13, and 11 times, respectively, giving a “recommended” investment rating.
Risk warning
Risk of declining industry sentiment, risk of terminal product sales falling short of expectations, risk of capacity construction falling short of expectations, risk of increased competition in the industry, etc.
