China's leading precision electronic components manufacturer with stable performance and substantial profit growth
The company is a leading precision electronic components enterprise in China. Over the years, it has deeply cultivated manufacturing technologies such as mold development, precision stamping and injection molding, and provides internal and external connectors, shields and other solutions and products for mobile phones, automobiles and other customers. The company's performance growth has been stable in recent years. From 2013 to 2015, the company's operating income compound growth rate was 0.96%. In the first half of 2016, the company realized operating income of 159.1535 million yuan, an increase of 5.51% over the same period last year, and a net profit of 24.1811 million yuan, an increase of 93.38% over the same period last year.
The market for connectors and shields is vast, and the proportion of automobile business continues to increase.
In recent years, with the rapid development of mobile communication industry, China has gradually become the most mobile communication terminal producer in the world. As of 2015, China accounted for about 82.60% of the world's mobile phone production. At the same time, China's automobile industry has made great progress, and its production and sales have increased year by year, making it the largest automobile producer in the world. The rapid development of mobile communication and automobile industry has brought a huge demand for mobile phone car connectors and shields. According to the data of China Electronic components Industry Association, the market size of mobile phone car connectors and shields in China reached about 38.078 billion yuan in 2015 and is expected to reach 50.091 billion yuan in 2020. At present, due to the fierce competition in the mobile phone connector and shield industry, the profit margin of this kind of products has declined in recent years. Due to the characteristics of special performance requirements, high certification threshold and long certification time, the competition of automotive connectors and shields is relatively relaxed, and the profit margin also maintains a relatively high level. The company adjusts the product structure in time according to the market situation, actively promotes the expansion and innovation of automotive product business, and constantly increases the product research and development, which makes the product business in related fields grow obviously. The company's revenue from automotive products grew at a compound growth rate of 26.91% from 2013 to 2015, and its revenue share increased from 29.75% in 2013 to 59.72% in the first half of 2016, becoming the company's leading business.
Leading technology to build core competitiveness, excellent customer resources to help the development of the company
The company is a large-scale professional enterprise with connector and shield design, development and production capacity. At present, it is equipped with a professional R & D team of 169 people, covering product design, mold design, process engineering and other fields. Since its inception, the company has persisted in technology-driven, has mastered 25 domestic leading core technologies, accumulated rich experience in the research and development of automotive precision connectors and shields, and established a competitive advantage in the field of core products. The company's products have successfully entered the supply chain system of downstream leading customers. At present, the products are mainly supplied to Keshida, Valeo, ZTE Corporation, BYD, Sanxin Electric and other mobile phone and automotive industry leaders.
Investment advice: buy investment rating, 6-month target price of 43 yuan. From 2016 to 2018, we expect the company's operating income to grow by 20%, 25% and 25% respectively, and net profit to grow by 45.97%, 19.36% and 21.95% respectively. Thanks to the growth in demand for automotive mobile phones and the large market capacity of connectors and shields, we are optimistic about the company's future and give it a buy investment rating with a target price of 43 yuan in 6 months.
Risk hints: rising raw material prices, unfavorable expansion of new customers, and slowing car sales