Main points of investment
Events:
Company announcement: revenue in the first half of 2023 was 350 million yuan, an increase of 42% over the same period last year, and net profit was 60 million yuan, an increase of 16% over the same period last year. Of this total, the income in the second quarter was 190 million yuan, an increase of 21% over the same period last year, and the net profit of returning home was 30 million yuan, down 11% from the same period last year.
The order delivery of power lithium equipment increased rapidly in the first half of the year; the larger increase in R & D expense rate benefited from the confirmation of power lithium equipment order delivery, and the income increased rapidly in the first half of the year. The gross profit margin in the first half of 2023 was 52%, an increase in 3pct over the same period last year, and profitability remained at a high level. In the first half of 2023, the rates of sales expenses, management expenses and R & D expenses were 10.6%, 6.9% and 15.6% respectively, an increase of 1.6pct, 0.1pct and 2.8pct over the same period last year. At the end of June, the company's contract debt was 40 million yuan, down 70 million yuan from the end of last year and 100 million yuan lower than the same period last year.
China's ultrasonic welding equipment leader, power battery as the core application field of the company's main products are ultrasonic welding, cutting equipment and so on, as well as power lithium production automation solutions. In 2022, the revenue of power lithium ultrasonic welding equipment accounted for 61%. Accessories account for 19%, power battery manufacturing automation system accounts for 12%. Most of the management teams, including the controller and the chairman, come from the machinery major of Shanghai Jiaotong University with a strong technical background. The compound growth rate of the company's parent net profit from 2019 to 2022 is 47%, with strong growth.
From 2018 to 2021, the company's average gross profit margin / ROE (weighted) reached 55% and 24%, with strong profitability.
Ultrasonic equipment has a wide range of uses, and it is expected to accelerate the application in new fields such as composite current collector. It is expected that the market size of ultrasonic welding equipment will exceed 3 billion yuan in 2025, and the industry will grow at a compound rate of 20% in the next 4 years.
Among them, power lithium battery is an important application field, and under the trend of composite current collector industry, the demand for ultrasonic rolling welding machine corresponding to single GWh is 3 times higher than that of traditional polar ear ultrasonic welding equipment. Automobile wiring harness and IGBT will become new important growth points, and the industry is expected to grow at a compound growth rate of 54% and 66% respectively from 2022 to 2025.
The domestic substitution in the field of lithium power is smooth, and the company's technology and customer advantages are obvious. The main competitors of the company in the field of lithium are Bineng Xin and Sonics. The company leads the domestic substitution. According to the prospectus, it purchases more than 50% of similar products in Ningde era and BYD in 2021.
At the same time, the company has also cut into Guoxuan Hi-Tech, China New Airlines, Yiwei Lithium Energy, Xinwanda, Honeycomb Energy, Funeng Technology and other first-line power battery enterprises. In high-voltage car wiring harness, IGBT and other high barriers, the company's main competitor is Germany Xiongke, the company's product performance is better than its domestic counterparts, is actively promoting domestic substitution.
Profit forecast and valuation
It is estimated that the company's homing net profit from 2023 to 2025 will be 1.7,2.5 and 340 million yuan respectively, with year-on-year growth rates of 53%, 47% and 33% respectively, with corresponding PE of 59, 40 and 30 times respectively, maintaining a "buy" rating.
Risk hint
Technological change and product research and development risk, high customer concentration and major customer dependence risk, import of important parts account for a large risk.