Event: in the first quarter of 2022, the company achieved operating income of 661 million yuan, down 5.55% from the same period last year, and net profit of 41 million yuan from the same period last year, down 12.84% from the same period last year. 32 million yuan was deducted from non-parent net profit, down 26.06% from the same period last year.

In 2021, the company achieved operating income of 3.521 billion yuan, an increase of 26.39% over the same period last year, and net profit of 242 million yuan, down 1.96% from the same period last year, deducting 211 million yuan of non-return net profit, down 2.79% from the same period last year.

The domestic epidemic is a drag on demand and logistics, focusing on layout and laying a solid foundation for growth. In the first quarter of this year, especially in March, outbreaks occurred one after another in China's electronic clusters in the Pearl River Delta and Yangtze River Delta regions, which on the one hand dragged down the demand of the relevant downstream, on the other hand, caused the suspension of production and production of most enterprises, and the blocking of logistics led to delays in product delivery. in this environment, the company's revenue and performance declined slightly in the first quarter compared with the same period last year. However, even in the face of many uncertain factors, the company still promotes various layouts step by step along the set goal and direction, such as the increase of the production rate of the new PCB production line and the investment of the new production line, the development of the new core downstream, and the improvement of integrated solution capacity, and so on. On the whole, the company's growth genes have been further strengthened, waiting for the performance of the epidemic after the remission.

Endogenesis and extension optimize the solution configuration at the same time, and strengthen the integrated solution capability of the upstream and downstream of the industrial chain. The company is one of the few domestic enterprises from simple PCB supply to integrated service of "PCB+ components + electronic assembly + solution". Especially in the past two years, the company has continuously optimized the configuration of solution business groups and achieved effective coordination with PCB business groups through the endogenous establishment of Bosmin, Yu Licheng, micro-core business department, epitaxial reference, holding Juntian Hengxun, art sense, etc. In order to achieve effective cost control, the improvement of economic benefits and the enhancement of customer stickiness, the revenue share of the solution is increasing, and the scale effect is gradually emerging. The establishment of the Microcore Division enables the company to have the leading AMB/DBC/DPC production process in China, which has given rise to high value-added products and businesses such as ceramic liners, microwave passive components and electronic assembly of new energy vehicles, and the application downstream of the solution business extends from home appliances to military industry, new energy (automobiles, motorcycles, energy storage) and power semiconductors. The company has become the first Invanti five-wheel electric vehicle electric control system supplier equipped with Huawei Hongmeng Zhaopin. it is a successful case of the company's one-stop service business model. It is expected to achieve more customer breakthroughs and constantly cultivate new performance growth points.

The layout of new energy vehicles has been continuously consolidated, and it has been recognized by core customers to highlight competitive advantages. In recent years, relying on the patented product "strong and weak electricity integration special circuit board" of PCB business group, the company actively seeks to provide one-stop service of design, production, electronic assembly and commissioning for new energy vehicle customers, and seeks to transform the role of professional PCBA solution provider for power control module of new energy vehicle. The newly established microcore division is equipped with electronic assembly of new energy vehicle, and ceramic liner is used as the carrier of high voltage SiC and IGBT. In the future, there is also a large market promotion space for new energy vehicles, and the newly developed high-density and high-speed PCB products supporting chip bypass strategy have been recognized by customers and mass produced. On the whole, the layout of the company in the field of new energy vehicles is constantly improving. at present, the leading domestic new energy vehicle enterprises have been successfully developed and designated cooperation projects have been obtained. the certification and introduction process is very cautious, high verification difficulty and long import cycle have become the company's natural competition barriers, at a time when the new energy vehicle industry is about to break out. The value of the company's past layout is gradually being reflected, and the company's share of automotive electronics revenue is expected to continue to increase in the future.

Focus on high value-added boards such as HDI and special boards to steadily expand PCB production capacity. At present, although the output value of PCB in China has occupied the leading position in the market, the proportion of multilayer plates is still in the leading position. With the upgrading of consumer electronics and the rise of automotive electronics, PCB products will gradually develop to high performance and high density. HDI, rigid-flex laminate, IC carrier board and so on are expected to become the main force of follow-up growth. The layout of the company in the field of PCB has always been technology-oriented, Jiangsu Bomin Phase II project positioning HDI and IC board is expected to reach production this year, Meizhou new generation electronic information industry investment and expansion project positioning high multi-laminate and special board is progressing steadily, and the steady expansion of PCB capacity will be the basis for the company's future growth.

Profit forecast and investment rating: maintain buy rating. In recent years, the company continues to win new customer orders in the main business of HDI and related fields of vehicle, specialty and military PCB, and extends its business field to many fields such as electric control board, integrated pre-embedded PCB, power semiconductor substrate and so on. The development of the solution business group has entered an accelerated period, and it is expected to form a good situation in many fields in the future. However, since the first quarter of this year, the impact of the long and short feet of materials in the consumer electronics supply chain and the logistics blockage of the epidemic still has a certain impact on the PCB industry and the terminal industry. We estimate that the company's net profit from 2022 to 2024 will be 289 million, 411 million and 523 million respectively. The current share price corresponds to 15.29,10.73 and 8.45 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.