Precision metal one-stop provider, judged that the improvement of internal and external factors in the 5G era, the performance reached the inflection point, the 5G era performance flexibility. The company has precision metal manufacturing "one-stop" service capability, with consumer electronics as the core, continues to expand product categories to medical devices, photovoltaic products and other structural components, covering Foxconn, Apple Inc, Huawei, Lenovo and other mainstream customers. The company's revenue in 11-18 was 55% CAGR. In 1919, the industry innovation slowed down, R & D investment was large, mass production fell short of expectations and inventory calculation led to short-term pressure. We judged that with the improvement of internal and external factors, 20-year 5G replacement boosts sales + downstream boom. Internal: the automation transformation and the expansion of key customers are smooth. At the same time, the company raised 610 million yuan in convertible bonds in 18 years to expand its annual production of 200 million precision metal structures, which was completed at the end of the 19th year. The inflection point of the company's performance appears, and the performance in the 5G era is highly elastic.
Metal small pieces to transform large pieces, multi-product lines cut into Apple Inc, at the same time the introduction of Huawei laptop, customer diversification.
The company has bound Apple Inc + Huawei two major consumer electronics leaders. Apple Inc: the company has provided iPad structures such as mute keys and lens rings through Jepp in 12 years, and cut into the supply chain of iPhone stainless steel / aluminum alloy frames in 17 years ("precision forging + CNC" process stainless steel frames). It has expanded from small pieces of consumer electronics to large ones. At present, it has cut into iPad, iPad Pencil, MacBook and other product lines, and will continue to be optimistic in the future:
1) in 20 years, Apple Inc will enter the super cycle of communication + ID innovation, and launch a number of new 5G models; 2) 5G mobile phones use metal frame + glass / ceramic, the value increases from 50 million 150 yuan to > 180 yuan; 3) the company has completed technology research and development, notebook computer hinges and other products have entered the stage of mass production, the technical threshold is high and the supply chain status is scarce. Huawei: the company has mastered a complete set of precision metal manufacturing services and supporting technologies to meet the "one-stop" service, and cut into Huawei notebook supply chain. Huawei notebook is expected to enjoy high growth, continuous penetration of domestic notebook customers, and customer diversification.
A-share medical equipment is scarce, cut into e-cigarettes to create a new performance growth point. The company is actively stuck in medical, e-cigarette and other areas: 1) Medical: the global medical device industry is expected to reach US $532.8 billion in 2022, stimulating the demand for precision structural devices. The company has cut into the Medtronic PLC supply chain of the second medical device company in the United States for 14 years, and is expected to continue to benefit from high-end customer resources and steady growth in performance. The company established Corson Healthcare in 18 years to continuously enhance the core competitiveness of the medical device field. The medical surgical structure is the product with the highest gross profit margin (maintained at more than 48% in 13-18 years), which is expected to become the next important business growth point. 2) E-cigarettes: with the strengthening of tobacco control efforts and public health awareness in various countries, the global market size of e-cigarettes is expected to reach US $61.4 billion in 2025. The company acquires Yuancheng Electronics to improve precision die-casting technology and actively card e-cigarettes. At present, it has cut into the supply chain of precision metal structures of a well-known e-cigarette brand, and is expected to enjoy the growth of the industry.
Investment suggestion: the company's net profit for 20-22 years is expected to be 1.81,4.02 and 518 million yuan, and the company will be given a 21-year PE=30x, corresponding to the target price of 24.9 yuan per share.
Risk hints: increased competition in the industry, the company's product research and development is not as expected, and 5G construction progress is not as expected.