Domestic industrial automation test & assembly expert. 1) Berger shares was founded in 2005, starting from testing fixtures, and now forms a business structure with equal emphasis on automatic testing equipment and automatic assembly equipment. 2) the company has mastered the core technologies such as electrical testing (ICT/FCT), acoustic testing, radio frequency testing, optical testing, visual inspection, automated testing, automatic assembly intelligent manufacturing and system integration, and the R & D expense rate is maintained at more than 10% all the year round. 3) from 2016 to 2018, the company's operating income CAGR reached 32.68%, driven by the sales of industrial automation equipment products. According to the performance of KuaiBao, the company achieved operating income of 827 million yuan in 2019, an increase of 20.29% over the same period last year, still maintaining a countercyclical expansion trend.
Financial decoding: the gross profit margin is maintained at 50%, and the operating efficiency is better than that of peers. 1) the company's industrial automation equipment has contributed more than 80% of the operating income for a long time, and the gross profit margin has been maintained at 50%. The new automation equipment made by the company shows an upward trend in volume and price from 2016 to 2018, and is expected to improve further with the improvement of the technical added value of the products in 2020. 2) the company has sound management and strong payback ability, the turnover rate of accounts receivable and bills receivable is generally higher than that of comparable companies in the same industry, and the ratio of net cash flow to net profit of operating activities is basically maintained at 100%.
Bind to the world's top customers, forward-looking research and development can be expected. 1) the company's core customers include Apple Inc, Hon Hai Group, Microsoft Corp, Quanta Group, CRRC Corporation and other high-quality companies, and the downstream covers consumer electronics, automotive electronics, communications and other fields, of which Apple Inc is the largest customer. Since the company obtained Apple Inc supplier qualification in 2010, RF test products have covered almost all categories of Apple Inc terminals. In 2018, Apple Inc's direct orders-OEM orders accounted for 45.70% of total revenue. In addition, the company horizontally expand the field of cooperation with Apple Inc, dig deep into the demand for automatic assembly.
2) since 2017, the company has been looking forward to the research and development of industrial automation equipment in FPC, 5G and other fields, and in 2018 it has become a qualified supplier of Qualcomm Inc and achieved batch sales. 2019H1 comes from the volume of Qualcomm Inc's business income exceeding 2018.
5G year, consumer electronics-RF shielding equipment is expected to rebound strongly. We believe that the impact of 5G on the company's business is reflected in two dimensions: 1) 5G accelerates the replacement tide, driving consumer electronics terminal sales to stabilize upward, and the company's original main business is expected to accelerate growth. 2) 5G brings new technological innovation in RF technology and components, and the company's 5G RF forward-looking R & D has entered the harvest period. The domestic shielding boxes within 4G are easy to assemble and have low technical barriers. The main driving factors for the shielding box market in the 5G era are: ① 5G is the era of the Internet of everything, with terminal applications such as smartwatches, TWS, smart speakers and self-driving emerging one after another and using a wide range of scenarios. ② 5G has higher requirements for high signal isolation, and the demand for 6GHzRF testing equipment has greatly increased. Bojie is one of the few domestic shielded box manufacturers certified by Qualcomm Inc. ③ shielding box is consumable, with a life cycle of less than 2 years, or even changed once a year. According to Myers Consulting, global RF test equipment will reach 3.21 billion US dollars in 2023.
Investment advice: increase the holding of-An investment rating. We estimate that the company's revenue growth from 2019 to 2021 will be 20.3%, 56.2% and 54.9% respectively, and the net profit growth rate will be 34.8%, 59.9% and 63.2% respectively. The current market price corresponds to a dynamic price-to-earnings ratio of 42.5 times in 2020, which still has room for growth according to the absolute valuation method.
Risk hints: market competition risk, single customer dependence risk, relatively large risk of export and so on.