Connector components start, expand FPC+ connector business, cover for the first time, give "buy" rating company start from connector components, now form three categories of products: FPC, connector components, LED backlight module, among which FPC soft board has entered the domestic core customer Ningde era supply chain, is expected to benefit from new energy vehicle power battery management system and energy storage battery management application. Connector components business has cut into the global leader of Amfino, Shentai, Morse and other customer supply chains, for communications downstream products, is expected to supply other applications in the future. We forecast that the company's operating income from 2022 to 2024 will be 2.52 trillion yuan, the net profit of the parent company will be 2.87 billion yuan, and the YoY+37.5%/33.0%/26.7%,EPS will be 1.19 shock 2.01 yuan, and the current share price will be 15.3 times the PE corresponding to 25.8 shock 19.4 shock.
Power battery + energy storage application, drive new energy FPC products infiltrate new energy vehicles, FPC instead of the traditional wire harness scheme, used for power battery core temperature and voltage acquisition. The increase of mileage of new energy vehicles promotes the increase of cell integration in the battery module, which corresponds to the increase of the amount of FPC soft board. In the field of energy storage, the policy drives the development of the new energy storage market, while the competition pattern of the energy storage battery market is concentrated, and the Ningde era takes the lead in the market share at home and abroad. With the cooperation between the company and Ningde Times, the FPC business of power battery and energy storage battery application is expected to accelerate development, the structural increase of power battery management system products is expected to increase the unit price, and the company continues to optimize the process structure to boost profits.
Connectors: leading manufacturers benefit from communications applications, and the company is profitable and robust connectors are widely used downstream. According to Bishop & Associate statistics, the global connector market is expected to exceed US $90 billion in 2023, with an annual compound growth rate of 12.8%. Communications and cars are the main downstream applications, accounting for 23.1% and 22.6%, respectively. In the field of communication connectors, with the development of 5G network construction and 6G pre-research to high frequency, modularization and miniaturization, the market demand for board-to-board RF connectors, high-speed backplane connectors and Ihand O connectors is expected to be released. The company has full-process production capacity, with precision mold design and manufacturing and stamping technology with Amfino and other customers in-depth cooperation, the profit level surpasses that of their peers.
Risk tips: increased competition in the connector components industry, lower-than-expected demand for FPC, rising prices of raw materials, and increased dependence on core customers.