Events:
The company released its semi-annual report for 2022 on August 13, 2022. According to the report, 2022H1, the company achieved operating income of 171 million yuan, an increase of 39.72% over the same period last year, and realized net profit of-32 million yuan, down 186.21% from the same period last year.
Comments:
The new copper foil business contributes revenue, and the shielding film is dragged down by the weakness of consumer electronics. 2022H1, the company's operating income reached 171 million yuan, an increase of 39.72% over the same period last year. Specifically, the income of the electromagnetic shielding film reached 98 million yuan, down 16.77% from the same period last year, mainly due to the decline in sales and price pressure of consumer electronics; benefiting from the production of the Zhuhai copper foil project since Q4 in 21, the revenue of copper foil was 71 million yuan. Become a new revenue growth point.
Copper foil climbing + provision for impairment of inventory affects profitability. 2022H1, the company's gross profit margin was 26.28%, a year-on-year decline of 37.44pct, mainly due to (1) lithium copper foil, standard electronic copper foil as transitional products, customers are traders, the price is lower than the market price, copper foil capacity utilization, yield climbing period, the cost is high, and sales decreased in the second quarter affected by the epidemic; (2) the shielding film was reduced by the poor climate of consumer electronics. On the cost side, 2022H1's period expense rate is 37.08%, year-on-year + 2.63pct; sales / management / finance / R & D expense rates are 2.92%, 10.25%, 0.6%, 23.31%, respectively, compared with the same period last year. 4.8pct; the rapid increase in R & D expenses is mainly due to (1) increased R & D efforts and R & D materials investment. (2) the Zhuhai copper foil project was put into production and the electrochemical R & D platform was completed, and the salaries of R & D personnel and managers and equipment depreciation increased. In addition, the decline in the company's net profit was also affected by the sharp drop in the price of copper foil products and the provision for 1821 million inventory impairment.
The demand for electromagnetic shielding film is expected to pick up, and the new product line opens the growth space. Looking forward to the follow-up, with the growing demand for new energy vehicles FPC and consumer demand bottoming out, the company's main electromagnetic shielding film is expected to usher in growth. Peelable ultra-thin copper foil is currently undergoing customer certification, has basically passed the physical properties, process testing, and is expected to benefit from the domestic demand of IC carrier plate and class carrier plate. The first phase production line of flexible copper clad laminate (FCCL) has been debugged, and some ordinary FCCL products have received good feedback from customers. It is expected to get small orders in the second half of the year, and the products use their own copper foil, which has a cost advantage. Some products of resistance film have passed the basic physical property and process test and batch stability test of important customers. With the commissioning of the new product line, the company's long-term growth space continues to expand.
Earnings forecast and valuation: taking into account consumer electronics demand and copper foil progress is not as expected, downgrade earnings forecast, the company is expected to 2022 EPS 2023 in 2024 is 0.16 shock 0.77 shock 2.09 yuan, the current share price corresponding to PE is 356.02 shock 75.27 shock 27.65 times, maintaining the "buy" rating.
Risk hint: the prosperity of the industry is not as good as expected, and the product certification is not as expected.