Event: On August 13, the company released its 2022 semi-annual report. The company achieved net profit attributable to shareholders of listed companies in the first half of 2022 of 160,986,341.08 yuan, an increase of 24.86% over the previous year.
Net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss is expected to be 156,188,238.60 yuan, an increase of 52,163,295.78 yuan compared with the same period last year, an increase of 50.14% over the previous year.
The product structure continues to be optimized, and the company's performance is showing an upward trend: According to Prismark's forecast, the global PCB industry output value will reach 101,559 billion US dollars in 2026, and China's PCB output value will reach 54.605 billion US dollars. The semi-annual report revealed that in the first half of 2022, the company focused on industry strategy to broaden its high-quality customer base and successfully passed the certification of well-known automotive electronics customers. The share of automotive electronics products increased dramatically, the overall proportion of communication and server products remained stable, and the company's product structure was further optimized. The semi-annual report revealed that the first phase of the Ji'an Shengyi project reached design production capacity in the first half of this year, and the products were targeted at high-end products in automotive electronics, servers, communications and other application fields. In the first half of 2022, Ji'an Shengyi achieved operating income of 375.2713 million yuan, an increase of 109.65% over the same period last year, and achieved net profit of 25.575 million yuan. The Dongcheng Plant (Phase IV) high-speed high-density printed circuit board expansion and upgrade project and R&D center construction project in the field of 5G applications progressed in an orderly manner, and the Ji'an Plant (Phase II) multi-layer printed circuit board construction project progressed comprehensively, further enhancing the company's core competitiveness. The semi-annual report revealed that during the reporting period, the company achieved operating income of 1,799 million yuan, an increase of 6.53% over the previous year; achieved net profit of 161 million, an increase of 24.86% over the reporting period; gross profit margin of 23.95% during the reporting period, gross profit margin of 21.16% for the same period in 2021, 20.29% gross profit margin for the full year of 2021, and a steady increase in profitability. The year-on-year growth rate of the company's net profit for 202Q3-202Q2 was -44.12%/76.51%/16.08%/33.61% respectively, showing an upward trend in the company's performance.
Continuously increase investment in R&D and maintain the leading position in technology in the industry: the semi-annual report revealed that in the first half of 2022, the company's cumulative R&D investment reached 101 million, an increase of 13.55% over the previous year. During the reporting period, the company applied for 30 new invention patents, applied for 19 new PCT international applications, obtained 23 new invention patents, participated in formulating publication standards 1 new item, and published 2 new technical papers.
Based on the original core technology, the company continued to carry out research results of projects such as “Research and Industrialization of 100G-400G High-speed Optical Module Printed Circuit Board Production Technology” and “Development and Industrialization of Thermoelectric Integrated PCBs with Built-in Conductive Media for 5G Base Stations”, while adding “Research and development of high-reliability printed circuit boards for Power10 servers” and “Research and development of many special material laminated printed circuit boards for AAU products of Sub 6G”, and the high-end printed circuit boards developed by these projects were widely developed. It is used in 5G energy, smart car electronics, 5G communication base stations, high-end servers and other fields.
Promote digital transformation and upgrading, and enhance the company's manufacturing and management capabilities. The semi-annual report revealed that in terms of production intelligent manufacturing, the company's equipment management cross-platform system based on lean TPM was fully launched; the PLM system's process parameter distribution project was implemented in the implementation phase; the quality visualization system was launched; the quality inspection CP system completed framework development; the Ji'an Phase I intelligent manufacturing project continued to improve and upgrade and initiated the second phase of intelligent manufacturing planning; Dongcheng Phase IV Intelligent Manufacturing carried out software and hardware construction in an orderly manner according to the blueprint plan; the factory PCS traceability project completed planning and design. So far, the Group has been able to collect more than 100,000 types of process data in real time from more than 1,000 machines, automatically distribute recipes for more than 2000 types of process parameters to the equipment, and drive continuous improvement of process technology and quality management capabilities using data. In terms of intelligent management, the SAP ERP HANA upgrade project was successfully implemented; the BI Business Finance Theme Group was applied online; the ERP blueprint process for Hong Kong subsidiaries was formulated, configured and developed; the SRM system platform was gradually optimized. The digitalization of the company's informatization promoted the continuous improvement of the company's comprehensive operation and management level.
Investment advice: We expect the company's revenue from 2022 to 2024 to be 4,567 billion yuan, 5,548 million yuan, and 6.741 billion yuan respectively, and net profit of the mother is 377 million yuan, 476 million yuan, and 616 million yuan respectively. For the first time, we have given a “buy-A” investment rating.
Risk warning: downstream market demand falls short of expected risks; risk of fluctuations in raw material prices; risk of increased market competition.