Introduction to this report:
The company's 23H1 performance is under pressure. The downstream market for electromagnetic shielding films is broad, and the release of the company's products is expected to accelerate. At the same time, the company's copper foil products are continuously optimized, and the peelable ultra-thin copper foil/FCCL is gradually being implemented.
Key points of investment:
Maintain the holdings increase rating and lower the target price to 56.0 yuan. Considering its product price pressure and the pace of new product release and upfront investment, it lowered its 2023-2024 EPS to -0.86 and 0.70 yuan (previous values were 0.72 and 3.77 yuan), and its 2025 EPS is expected to be 1.58 yuan. Referring to the average valuation of the industry and considering the explosive power of its performance after the new product certification was passed, the 2024 PE80X was given, the target price was lowered to 56.0 yuan, and the rating for increasing its holdings was maintained.
The company's 23H1 performance was under pressure and fell short of expectations. The company's 23H1 revenue of 172 million yuan increased 0.31% year on year, and net profit to parent was -44 million yuan, down 35.69% year on year. This is mainly because the overall supply and demand in the electronic copper foil industry affected the decline in sales prices. The production cost of superimposed copper foil was high, which led to a year-on-year decline in profits; at the same time, sluggish shipments of 3C equipment led to pressure on the volume and price of shielding film.
The downstream market for electromagnetic shielding films is broad, and the release of the company's products is expected to accelerate. Currently, the company's products have been widely used in well-known terminal brands. In the future, as the demand for “light and short” and high-frequency high-speed consumer electronics products becomes more and more prominent, the intelligent trend of new energy vehicles accelerates and popularization, and the electromagnetic shielding film market space is expected to expand. The company's high-performance, customized electromagnetic shielding film has entered the mass production stage and continues to be iteratively upgraded. It is expected to grasp industry trends and grow together with downstream demand.
Copper foil products are continuously being optimized, and ultra-thin copper foil/FCCL that can be peeled off is gradually being implemented. The company's peelable ultra-thin copper foil is currently undergoing customer certification. The sample delivery quality is stable. A wide format product has passed physical properties and process tests by some carrier board manufacturers, passed the first round of verification on some terminals, and has obtained small orders. The company's regular FCCL implemented small orders during the reporting period, and the extremely thin FCCL is currently in the customer testing and certification stage.
Risk warning. The company's new product introduction progress fell short of expectations; raw material prices fluctuated sharply