Shannon Xinchuang: Mergers and acquisitions co-created Thai to lay out electronic components and semiconductor distribution business. Since the establishment of the company until July 2021, the company has mainly engaged in R&D, production and sales of new, energy-efficient washing machine deceleration clutches, and has successively supplied washing machine manufacturers such as Haier, Midea, and Hisense. As competition in the company's traditional main business market intensifies and it is difficult to achieve a major breakthrough, the company completed the acquisition of United Chuangtai in 2021 and used this as an opportunity to enter the electronic components distribution industry, quickly obtain resources such as Liangchuangtai's product line and customer base, and further realize the company's transformation into the semiconductor industry. Since Liangchuangtai began to be included in the company's consolidated statements in July 2021, the company's main business changed from electrical machinery and equipment manufacturing business to electronic component distribution business. In 2021, the company achieved operating income of 9.21 billion yuan, an increase of 3377% over the previous year; net profit attributable to shareholders of the parent company was 224 million yuan, an increase of 248% over the previous year.
The agency qualifications and customer resources are excellent, and the electronic distribution business is expected to continue to grow. United Chuangtai is a professional authorized distributor of electronic component products. Established in Hong Kong in 2013, it mainly represents internationally renowned resource-based product lines. United Chuangtai has high-quality original agent qualifications and customer resources. Focusing on core components, Lixun Chuangtai has authorized agency rights for SK Hynix, one of the world's top three industry-wide memory suppliers; MTK, a world-famous master chip brand; GigaDevice (GigaDevice), a leader in the domestic storage control chip field; and agency qualifications for various brands such as Lixun, Sharp, and Cambrian. Currently, customers include leading customers in various industries such as the Internet cloud service industry, mobile communication industry, IoT intelligent industry, ODM manufacturing, etc., including Alibaba, Zhongba Group, ByteDance, Huaqin Communications, Ziguang Storage, Lixun, Baidu, Tianlong Mobile, Yiyuan Communications, Wuhan Fenghuo, Ace Communications, Zhanhua Group, etc. In 2021, United Chuangtai achieved revenue of 12.997 billion yuan, an increase of 99% over the previous year; Guimu achieved net profit of 302 million yuan, an increase of 497% over the previous year. Among them, in July-December 2021, United Chuangtai achieved revenue of 8.88 billion yuan and net profit of Guimu was 168 million yuan. After the merger in July 2021, United Chuangtai contributed greatly to the operation of listed companies.
We expect Co-Chuangtai's revenue for 2022-2024 to be 151/194/24 billion, respectively.
Build an innovation ecosystem for the entire high-end semiconductor industry chain. While expanding and strengthening its main business and gradually becoming a leading international electronic component distributor, the company has participated in outstanding enterprises in various segments such as Haoda Electronics, Ningbo Silicon Electronics, Microconduction Nano, and Bi-Zao Technology through equity investment to build an innovative ecological chain.
Performance forecasts, valuations and ratings: Shannon Xinchuang relies on United Chuangtai's active layout of the electronic distribution business, and is expected to maintain steady growth in the future. We forecast the company's operating revenue for 2022-2024 to be 15295/194.11/23.977 billion yuan respectively, and the net profit of the mother is 301/362/431 million yuan respectively, and the corresponding PE is 30/25/21 times. The company has high-quality chip manufacturer resources and customer resources. Through equity investment business, it lays out the semiconductor ecosystem. It has ecological advantages over comparable companies, and for the first time it has been given an “increase in holdings” rating.
Risk warning: Supplier dependency risk, risk of cancellation of authorization or failure to renew important product lines, risk of high customer concentration, risk of loss of goodwill.