The company is a leading company in photovoltaic junction boxes. Its main products are photovoltaic junction boxes and connector series products, and the gross margin level is expected to increase. The company has been deeply involved in the industry for 17 years, continuously expanding product lines and application fields, from single category products to multiple categories of products, expanding from domestic market to international market, and the scale of its main business has continued to expand.
The company's main customers include Jingao Solar, Tianhe Solar, HANSOL, GCL Integrated, etc. In recent years, the production and sales rate of the company's photovoltaic junction boxes has remained above 97%, and the capacity utilization rate is above 90%. The company's financial situation is sound, and the level of liquidity ratio and liquidity ratio are relatively high. In 2021, due to pressure from the upstream cost side, the company's gross margin declined to a certain extent. As the price of the upstream metal copper falls, we think the company's cost side is expected to improve, and the gross margin level is expected to increase.
The photovoltaic industry is booming, and the global PV junction box market is expected to be 18.86 billion in 2025. According to BP's forecast, renewable energy's share of global energy consumption will rise from 3% in 2015 to nearly 10% in 2035, and solar energy will usher in opportunities for rapid development. The global market for new photovoltaic modules is growing rapidly, and is expected to increase from 350 million units in 2020 to 665 million units in 2025. In the next 5 years, the cumulative installed capacity of photovoltaics in China will maintain a compound annual growth rate of 21%, and the cumulative installed capacity is expected to reach 662.82 GW by 2025. It is estimated that in 2025, the PV junction box market space in the domestic photovoltaic industry will be 18.86 billion yuan, and the market space for photovoltaic connectors will be 2,358 billion yuan.
The company has outstanding advantages in production, R&D and sales, and excellent financial data. The number of patents the company has is superior to its peers. The company focuses on R&D investment. The company is staffed with more than 60 technical R&D personnel and has obtained 109 patents and intellectual property rights. The advantages of vertical integration of Kuaike electronic product production are obvious. The revenue growth rate is relatively fast, the gross margin level is superior to that of peer companies, and the company has a complete sales network. The company has now established stable cooperative relationships with well-known domestic and foreign downstream enterprises such as Tianhe Solar, Jingao Solar, Artus, Dongfang Risheng, Youda Optoelectronics, Tongwei Co., Ltd., Suntech Electric, Zhonglai Co., Ltd., and HANSOL. The main customers are well-known photovoltaic module vendors in the photovoltaic industry, which are in a leading position in the industry.
Investment advice: The company is a leading enterprise in the photovoltaic junction box industry and continues to benefit from the high boom in the photovoltaic industry.
In 2022-2024, the company's net profit is estimated to be 103 million yuan, 164 million yuan and 249 million yuan respectively. Corresponding to the current stock price PE is 58.47X, 36.62X, and 24.15X respectively, covered for the first time, and given a “recommended” rating.
Risk warning: (1) downstream demand is slowing; (2) risk of fluctuations in upstream raw material prices; (3) the progress of fund-raising capacity falls short of expectations.