The company has been engaged in the electromagnetic shielding and heat conduction application industry for more than 20 years, and actively develops new energy-related products outside the original communications and consumer electronics fields. provide comprehensive thermal management, electromagnetic shielding and lightweight solutions for new energy vehicles, photovoltaic and energy storage. Benefiting from the rapid development of the new energy industry and the profitability repair brought about by the improvement of the company's capacity utilization, the company's performance is expected to usher in significant growth. Cover for the first time, giving a "buy" rating.
The company is a leading company in electromagnetic shielding and heat conduction application industry, with more than 20 years of deep ploughing industry. The company has developed a series of products and corresponding solutions around electromagnetic shielding and heat conduction applications, which can be used in communications, consumer electronics, new energy and other industries. In recent years, driven by the hot sales of new energy products in the field of new energy, such as battery end plates, liquid cooling plates, heat conduction pastes and inverter heat dissipation devices, the company's revenue share of thermal management materials and devices has increased from 13% in 2018 to 33% of 2022H1, becoming the company's business with the highest proportion of revenue, and is expected to develop at a high speed in the future.
Improve the technical layout through mergers and acquisitions and build the ability of a comprehensive solution of "shielding + heat + lightweight". Through its own R & D and acquisition of Bowei Communications, Kunshan Pindai, Runxingtai and other companies, the company realizes the layout of electromagnetic shielding, thermal management, base station antennas, lightweight, functional components and other multi-category products. it can meet the equipment integration and lightweight needs of customers in communications, consumer electronics and new energy industries, and the company can provide one-stop service for customers by virtue of the comprehensive capabilities of various categories.
The rapid growth of the automobile + energy storage + photovoltaic industry helps the company take off for the second time. We judge that photovoltaic is expected to become the mainstream energy by 2050; market-driven new energy vehicles, accelerated permeability, high growth in production and sales; electrochemical energy storage is expected to become the inevitable choice for the high growth of new energy power generation; the above industries put forward high demand for electromagnetic shielding materials, thermal management materials and lightweight components. The company has increased all kinds of investment and accumulated customers such as Ningde Times, Guangzhou Automobile Group and Sunshine Power supply in the fields of new energy vehicles and energy storage. in the future, with the rapid development of the new energy industry, the company is expected to achieve rapid growth in the field of new energy.
The inflection point of gross profit margin has arrived and profitability is expected to pick up gradually. Over the past two years, the company has invested heavily, demand in the areas of superimposed communications and consumer electronics has been lower than expected, and corporate profitability has declined. Q1 and Q2 in 2022 with the gradual mass production of products in the new energy industry, the company's capacity utilization rate has increased, leading to an improvement in gross profit margin compared with the previous year, and gross profit margin is expected to continue to improve in the second half of the year as capacity is further released. In the future, as the product structure continues to be adjusted and the revenue scale increases, the company's expense rate is expected to decline, and the overall profit level may gradually pick up.
Risk factors: intensified market competition; lower-than-expected growth of the new energy industry; price fluctuations of major raw materials; loss of technology secrets and loss of core technical personnel; management risks brought about by the continuous expansion of business scale.
Profit forecast, valuation and rating: the company has been engaged in electromagnetic shielding and heat conduction applications for more than 20 years, and has actively developed new energy-related products in addition to the original communications and consumer electronics fields. opened up new application fields such as new energy vehicles, photovoltaic and energy storage. Benefiting from the rapid development of the new energy industry and the profitability repair brought about by the improvement of the company's capacity utilization, the company's performance is expected to usher in significant growth. It is estimated that the company's net profit from 2022 to 2024 will be 0.11 trillion yuan, respectively, with a compound growth rate of 186%. Comprehensive PEG and PE valuation, give 2024 27 times PE, the target market value of 11.2 billion yuan, corresponding to the target price of 22 yuan, covered for the first time, given a "buy" rating.