Event: Chongda Technology released its half-yearly report in 2020, with an operating income of 2.17 billion yuan in the first half of the year, an increase of about 17% over the same period last year, and a net profit of 270 million yuan, an increase of about 2% over the same period last year.
Single-quarter sales revenue reached an all-time high, effectively promoting the key account strategy. Chongda Technology achieved an operating income of 1.24 billion yuan in a single quarter in 2020, a record high for a single quarter. The company has established a stable business relationship with a number of key customers around the world, and has entered into the core supplier of supercomputing and 5G base station products. In the first half of 2020, the proportion of sales area of high-volume orders (more than 20 square meters) increased to 74.55%, and high-end products such as HDI and 5G application PCB increased significantly compared with the same period last year.
The cost rate is controlled effectively and the investment in R & D is increased. In 2020, Q2 Chongda technology will further reduce the rate of sales expenses and management expenses. From a year-on-year point of view, the company's sales expense rate decreased by 0.7%, management expense rate decreased by 1.1%, and R & D expense rate increased by 0.7%. In the future, the company will continue to increase the R & D investment of 5G related products, especially in the application fields of communication transmission network, core network, data center and so on, so as to prepare for the mass production of 5G base stations' high-density and high-speed multilayer board related products.
Convertible bonds were approved to be issued, and the Zhuhai project continued to move forward. On July 22, 2020, Chongda Technology received approval from the China Securities Regulatory Commission to approve the company to issue convertible bonds with a total face value of 1.4 billion yuan. The funds raised by convertible bonds are mainly used for the circuit board project of Zhuhai Chongda Circuit Technology Co., Ltd. (phase I). In the first half of 2020, the company's construction project is about 570 million yuan, of which Zhuhai Chongda Garden is about 250 million yuan, and the company's new capacity construction continues to advance.
Maintain a rating of "better than the market". We have updated the company's profit forecast and refer to schedule 2 for changes in the main assumptions. It is estimated that the company's operating income from 2020 to 2022 is 4.56 billion yuan (+ 22.4%), 5.73 billion yuan (+ 25.7%), 7.22 billion yuan (+ 25.8%), and the net profit of returning mother is 604 million yuan (+ 14.8%), 809 million yuan (+ 34.1%) and 1.113 billion yuan (+ 37.5%) respectively. The corresponding EPS is 0.68,0.92 and 1.26 yuan, respectively. From 2020 to 2022, the valuation of PE is 29.43,21.95 and 15.96 times respectively. According to the valuation table of comparable companies, we give the company 33-38 times PE in 2020, corresponding to a reasonable value range of 22.44-25.84 yuan, maintaining a "better than the market" rating.
Risk hint: market competition risk, extension M & An integration risk.