Domestic electronic vacuum device leader, downstream coverage is wide. After more than 20 years of ploughing in the field of electronic vacuum devices, the company has established a complete core technology platform for electronic vacuum devices and independently mastered all aspects of research, development and production. Products include high voltage vacuum relays, ceramic high voltage vacuum capacitors, ceramic vacuum switches, high voltage DC contactors, AC vacuum contactors, etc. Downstream covers energy vehicles and charging facilities, semiconductor equipment, aerospace and military, photovoltaic wind energy and energy storage and other industries. In 22 years, the revenue was 700 million yuan (year-on-year + 37.53%), the net profit was 85 million yuan (+ 17.01%), the revenue of 23H1 was 289 million yuan (+ 3.58%), and the net profit was 28 million yuan (- 10.39%).
New energy: demand expansion & policy support to build performance safety cushion.
New energy vehicles and charging facilities: the company's high-voltage DC contactors are mainly used for main circuit control, pre-charging circuit control and charging control, solving the problem that traditional relays can not adapt to the high voltage of new energy vehicles and fast charging equipment. The company has established cooperative relations with Ningde Times, Funeng Technology, Huichuan Technology and other enterprises, and has entered the qualified supplier system of SAIC GM, NIO Inc. Automobile, Geely Automobile and other manufacturers. In 20-22, the business income was 1.16,1.84 and 301 million yuan, with a compound growth rate of 61.1%. According to Liding Industrial Research Institute, the company has a market share of about 8%, and we believe that the business is mainly growing with the overall demand growth of the new energy industry. We estimate that the scale of DC contactors required for trams and charging piles in 23-25 is nearly 20 billion yuan.
Wind storage: the company's AC contactors are used in photovoltaic inverters and wind power converters, and DC contactors are used in photovoltaic, wind power and energy storage circuit systems to protect circuits, prevent leakage and improve circuit life. At present, the company has successively supported Yingjie Electric, Chongqing Daquan Tailai Electric Co., Ltd., Xinjing and other new energy manufacturers' equipment. In the field of scenery storage, the company's revenue in 20-22 years was 1371 yuan, 2962 yuan and 52.47 million yuan, with a compound growth rate of 95.6%. We estimate that the demand for AC contactors for optical storage will be nearly 1 billion yuan in 23-25 years.
Semiconductors: domestic replacement acceleration, long-term growth is expected. The company is one of the early suppliers of electronic devices in semiconductor equipment, mainly producing vacuum capacitors and vacuum relays for RF power supply in semiconductor equipment, and the product performance parameters are basically the same as those of foreign competitors. The main customers abroad include Arrow Electronics, ADTEC PlasmaTechnology, ABB, etc., while the main domestic customers include North Huachuang, medium and Micro Semiconductors, and the State Administration of Radio and Television. According to the company's prospectus for convertible bonds, Huawei Technology became the company's fifth largest customer in 2022, with sales revenue of 20.87 million yuan. We believe that the company's products are highly scarce and are expected to deeply benefit from the domestic substitution process of the semiconductor industry. As the products have passed verification and testing, ushering in a large number of conditions, the semiconductor business will become the core support of the company's performance. We estimate that the annual demand for vacuum capacitors in the semiconductor field is about 8-4.2 billion yuan.
Military industry: solid-state power distribution technology breakthrough + model volume, medium-and short-term growth is prominent. The company is the forerunner of military vacuum devices. Vacuum relay is the basic core electronic component of power control and communication system. The company's products are used in military shortwave communications, over-the-horizon radar and other key projects, including space and satellite applications. Miniaturized and lightweight electronic vacuum products can help the whole machine to reduce the starting and traveling weight and increase the space of key task functional units, so it can gain competitive advantage in product volume, weight design and parameter distribution. At the same time, under the trend of full electrification of aircraft, solid-state power distribution technology will become the mainstream in the future.
Investment suggestion: the company is a leading manufacturer of electronic vacuum devices in China, with strong product scarcity and strong technical barriers. The steady growth of new energy downstream builds the performance safety cushion; the military business superimposes the volume of new machines with the breakthrough of solid-state power distribution technology, which highlights the medium-and short-term growth; and the semiconductor business accelerates with the domestic substitution process, and the long-term growth is expected. It is estimated that the operating income, net profit and EPS of the company from 2023 to 2025 are 8.74, 2.59 / 1.702 billion, 2.10 / 332 million and 1.11, respectively. Corresponding to the closing price of 60.27 yuan per share on September 8, 2023, PE was twice as much as 54-28-17, covering for the first time and given a "buy" rating.
Risk tips: new energy vehicle application field decline risk, downstream application field expansion risk, overseas market sales risk.