Event: the company released its annual report of 2022 and quarterly report of 2023. In 2022, the company achieved revenue of 313 million yuan, year-on-year + 6.89%, net profit of-68 million yuan, year-on-year-305.55%, deduction of non-net profit-82 million yuan, year-on-year-653.01%, gross profit 28.75%, year-on-year-19.18pcts. 2023Q1 achieved revenue of 76 million yuan, year-on-year-20.70%, home net profit of-22 million yuan, year-on-year-72.77%, deduction of non-net profit-27 million yuan, year-on-year-70.93%, gross profit 26.35%, year-on-year + 1.62pcts.
Short-term performance is under pressure, long-term space is expected: the company suffered a loss in 2022, mainly due to: 1) weak demand for mobile phones led to a large decline in shielding film revenue; 2) copper foil is mainly lithium copper foil, the price, capacity utilization, yield is not ideal lead to losses; 3) headquarters and production base put into production to increase depreciation; 4) new product research and development brings an increase in R & D investment. 2023Q1 mobile phone demand has not yet rebounded, copper foil to electronic copper foil short-term profitability is not as good as lithium copper foil in the same period last year, the overall revenue is still under pressure, but R & D costs have declined with the development of new products, which has a positive impact on profit release. Looking to the future, the company's shielding film business is expected to gradually improve with the recovery of downstream demand, the gradual transformation of copper foil product structure, the continuous development of new products, the trend of performance is good, and profit repair is expected.
The verification of strippable copper is smooth, opening the first year of localization of carrier materials: the United States, Japan and the Netherlands have intensified restrictions on China's semiconductor industry chain, copper can be stripped as the core raw materials upstream of IC board, and the demand for localization is prominent under the background of independent control. At present, the company is carrying out customer certification for copper stripping, and the sample delivery quality is stable. Some wide products have passed the physical property and process tests of some carrier plate manufacturers, and passed the first round verification of some terminals.
Composite copper foil sample delivery smoothly, based on a broad space of advantages: 2023 is expected to become the first year of mass production of composite copper foil, the company actively enters the bureau by virtue of its own equipment and process advantages. At present, the company PET copper foil has sent samples to some downstream customers, and is expected to occupy an important market share and open a new growth curve in the future.
Multi-high-end electronic material platform is gradually taking shape: 1) FCCL, currently carrying out small batch production, conventional FCCL has implemented small orders in the third and fourth quarters of 2022, and very thin FCCL is still in the stage of customer testing and certification. 2) Resistive film, mainly used for acoustic components of smart phones, is currently in the stage of customer certification, some products have passed the basic physical properties and process tests and batch stability tests of relevant customers, and terminal certification is under way.
Investment advice: although the company's short-term performance is under pressure, but the overall downstream development is smooth, we judge that the company's profitability is expected to gradually repair and enter a period of rapid growth. We expect the company's annual homing net profit on 23-24-25 to be RMB 201max 351 million, EPS 0.75max 2.51 max 4.37 per share, and corresponding PE 21.68max 12.46 times, maintaining the "overweight" rating.