Main points of investment

Rapid expansion of new business, performance to meet the new round of rapid growth opportunities: the company deeply ploughs the consumer electronics function market, building the core business at the same time through the continuous development of upstream new materials and downstream module products, the company's "material-parts-components-modules" R & D and innovation capabilities continue to deepen, to provide one-stop product solutions. The current products focus on consumer electronics, new energy vehicles, and information storage. Through in-depth cooperation with major international customers, the company's new energy vehicle business starts rapidly, accounting for nearly 30% of 22H1. The company continues to expand its business scope, expanding horizontally into 5G communications, high-power wireless charging systems, hydrogen fuel cells and other emerging markets, the company's performance ushered in a new round of rapid growth opportunities.

With the continuous innovation of major customers' mobile phones, the company's functional parts are expected to rise in both quantity and price: the company is the core precision functional parts supplier of the leading international brands. Benefiting from major customer smartphone and VR product innovation, the company needs to constantly upgrade and improve related feature solutions, which will lead to a significant increase in stand-alone value. At the same time, the synergy effect of subsidiary Shixin Technology and Weibo Precision is expected to appear gradually, and the relevant metal structures are also expected to be introduced into more major customers in the future to continue to expand the product line. The company is expected to fully benefit from the rising trend of product volume and price.

With the help of new energy vehicle giants to usher in rapid development opportunities: the sales of international new energy vehicle giants continue to grow rapidly, and the delivery volume of major customers' new energy vehicles reached 936200 in 2021, exceeding the total delivered in the previous two years. In 2021, the customer's domestic factory will be completed and the production capacity will continue to climb. After reaching full production, the domestic factory will have a pure electric vehicle production capacity of 750000 units, while the new factories in Texas and Berlin will have an estimated production capacity of 250000 units respectively. With the release of new factory capacity, international new energy vehicle customer sales are expected to maintain a momentum of rapid growth. The company's new US plant is currently under construction and is expected to start contributing revenue in 2023. The company has become the core supplier of international new energy vehicle giants, and continues to expand the range of new energy accessories, from the energy collection of new energy energy storage equipment to the accessories of core components such as new energy vehicle batteries, and then to the high-power wireless charging system of new energy vehicles, the value per car will continue to improve rapidly with the expansion of the product line, far exceeding the stand-alone value of mobile phones. New energy vehicle business will quickly become the company's new performance contribution point.

Profit forecast and investment rating: we predict that the company will earn 0.46,0.66,0.96 yuan per share in 22-24 years, respectively. The average PE of comparable companies is 22-24 times that of 53-16-12, and the current market value of the company corresponding to PE is respectively times that of 30-20-14. We are optimistic that the company's rapid development in the field of new energy vehicles and the increase in overall product value will lead to an increase in gross profit margin and net profit margin, giving the company 23 years 30 times PE. Corresponding to the target market value of 13.6 billion yuan, for the first time covered to give a "buy" rating.

Risk tips: core customer smartphone sales are not as expected, new energy vehicle sales are not as expected, and the progress of new product research and development is not as expected.