Event: the company announced its first three-quarter results notice and non-public offering plan on the evening of October 14 and 15, 2020, respectively.
The comments are as follows:
Q3 net profit turns into profit, order sufficient superimposed price increase profit persistence is strong. The company announced on the evening of October 14, 2020 that the net profit in the first three quarters of 2020 was a loss of 1800-26 million yuan, of which the Q3-quarter net profit was 1346-21.46 million yuan, which turned from a loss to a profit compared with the third quarter of last year and the second quarter of last year.
In the first half of the year, demand was mainly dragged down by COVID-19 's epidemic situation, while in the third quarter, the company increased its market development efforts and improved its internal management efficiency, the company had sufficient orders and increased sales unit prices, increased capacity utilization, and reduced production costs. it has achieved a large increase in net profit belonging to the shareholders of listed companies. Looking forward to the fourth quarter, with the end of the impact of the epidemic and the peak season of demand, we expect the persistence of orders and unit prices to be strong.
Plan to increase the power of high-precision lithium copper foil and copper clad laminate to provide new kinetic energy for growth. On the evening of October 15, the company announced a pre-plan for a non-public offering of shares, with a plan to invest no more than 35 people, which will raise no more than 1.8 billion yuan, mainly for (1) the construction project of high-precision ultra-thin lithium and copper foil with an annual output of 10000 tons, and (2) an annual output of 6 million high-end cores, an annual output of 7 million square meters of FCCL and supplementary working capital.
Lithium copper foil: the company has realized the trial production of 6 μ m ultra-thin lithium copper foil. The annual production capacity of 8000 tons of high-precision electronic copper foil will be increased by 8000 tons after the second phase of the project is put into production. At that time, the company's copper foil production capacity will reach 20, 000 tons, meeting the downstream demand for PCB and copper foil brought by new energy vehicles, cloud computing and storage. According to the company announcement, the project is expected to be mass produced in November 2020. After fully reaching production, it is expected to achieve revenue of 805 million yuan and net profit of 122 million yuan.
High-end integrated circuit substrate project: to help the company increase its annual production capacity of 5.5 million pieces of FR4-HDI special sheet and 500000 pieces of high-frequency copper clad laminate, of which CCL helps to meet the demand for domestic alternatives such as Rogers and Panasonic. It is estimated that the annual income of the project will be 738 million yuan after production, and the after-tax profit will be 61.82 million yuan. FCCL project will mainly increase the annual output of 7 million square meters of FCCL and 5 million square meters of film-covered capacity to meet the downstream FPC demand for high-end substrate materials, according to the company announcement, the project is expected to achieve annual income of 785 million yuan, estimated after-tax profit of 59.32 million yuan.
Profit Forecast: we predict that the company's 2020amp revenue in 2021 will be 1.2901,622 million yuan respectively, and its net profit will be 0.2220000 million, corresponding to 2020-2021 PE 330100,000,000. We are optimistic that the company will benefit from short-term and medium-term demand and price increases, and will benefit from domestic replacement of high-precision copper foil and high-frequency copper clad laminate in the medium and long term, maintaining the "overweight" rating.
Risk hint: downstream demand is lower than expected: domestic substitution is not as expected; capacity expansion slows down