Event description

Dexin Technology issued an annual performance forecast for 2022, which is expected to achieve a net profit of 1.41-210 million yuan in 2022, an increase of 99.38-196.94 percent over the same period last year. According to this estimate, 2022Q4 achieved a net profit of 0-68 million yuan.

Event comment

The performance was higher than the same period last year, and the acceptance factors were slightly lower than expected. The company's revenue and profit mainly comes from the subsidiary Zhihong Precision. According to the central value of the performance forecast, the company realized a net profit of about 176 million yuan in 2022, an increase of about 148% over the same period last year. Taking into account the company's larger share payment fees and performance awards in 2022, if it is added back, the company's operating net profit is expected to be higher. It is estimated that the median home net profit of 22Q4 is about 34 million yuan, which is about 37.5% lower than that of Q3, which is slightly lower than expected. This is mainly due to the impact of the epidemic at the end of the year, the progress of client acceptance and other factors, which makes the company 22Q4 confirm that the income is too low, which leads to a decline in net profit compared with the previous month. It is expected that the part of the less acceptance at the end of the year will be made up in the follow-up acceptance. In the follow-up, with the further release of the company's production capacity and order acceptance, the company's revenue and profit is expected to continue to grow, and the company will no longer have performance incentives in 2023, and share payment fees will also decline. It is expected that the growth rate of homed net profit at the end of the statement will be faster than revenue growth.

The cutting mold surpasses the industry growth, and the company's competition pattern is good. The permeability of lithium battery lamination process is gradually increasing, and the global demand for power and energy storage batteries using lamination solutions is expected to be close to 1000GWh in 2025, corresponding to a compound growth rate of about 60% from 2023 to 2025, with considerable alpha. The lithium electricity cutting die is the blade and its tool holder used to cut off the pole in the stacking machine or laminating all-in-one machine. it is the core component of the equipment and has the property of consumable materials. with the continuous growth of the output of laminated batteries, the market scale of lithium cutting die is expected to reach 5.5 billion yuan in 2025. The company has an excellent core team, leading technology, and experienced after-sales service team, high-speed response, making the company form a strong competitiveness, strong customer stickiness. At present, Zhihong Precision is the leader of lithium electric cutting mould, which has strong competitiveness in the field of precision mold manufacturing and has a good market pattern.

The good competition pattern also brings the company high profitability, and the company's high gross profit margin is expected to be maintained in the next few years.

The downstream space of the mold is broad, and it continues to expand new applications. Zhifeng Technology, a subsidiary of Zhihong Precision, has successfully developed a number of high-precision extrusion coating dies, which have successfully served the lithium industry and OCR glass plate coating, among which the slit extrusion die has been supplied in bulk. The downstream field of the mold industry is broad, the company actively develops the high-profit mold business such as coating head, and continues to expand the product category, which is expected to contribute to income and performance increment.

Maintain a "buy" rating. We estimate that the company's net profit from 2022 to 2023 will be 1.78 yuan and 529 million yuan respectively, corresponding to 85 and 29 times PE respectively, and will continue to give a "buy" rating.

Risk hint

1. The market penetration rate of lamination is not as good as expected.

2. The company's new products and new business development are not as expected.