Main points of investment
Event
The company announced that Shanghai Fuchi introduced Yuanzhi Spark in the form of capital increase and share expansion. In this capital increase, Yuanzhi Spark will increase the capital of Shanghai Fuchi by 282 million yuan in cash. After the completion of this capital increase, the proportion of shares held by Shanghai Fuchi will be changed from 75.00% to 63.75%. Will continue to be included in the scope of the company's consolidated statements.
Comment 1: Shenzhen state-owned assets invest in shares, complementary resources
The executive partners and managers of Yuanzhi Spark are Shenzhen Yuanzhi Venture Capital Co., Ltd., and the actual control is the State-owned assets Supervision and Administration Commission of Shenzhen Municipal people's Government. This transaction will help to achieve complementary resources, give full play to the resources and influence of investors in the Pearl River Delta region, and jointly promote the development of Shanghai Fuchi's main business in the Pearl River Delta region and the whole country.
Comment 2: with the rapid development of folding screen phones, the company's vertical extension hinge component TrendForce recently predicted that shipments of folding screen smartphones will grow to 18.3 million in 2023, an increase of 43% compared with the same period last year. The penetration rate of the folding screen is 1.6%. By 2024, shipments of folding screen smartphones will grow 38 per cent year-on-year, reaching 25.2 million units and a penetration rate of 2.2 per cent. Shipments are likely to grow to 70 million by 2027, with a penetration rate of about 5 per cent. Among them, Huawei is expected to ship about 2.5 million folding phones this year, increasing its global market share to 14%. In September 2023, Huawei officially launched a new model of folding screen Mate X5, which has triggered a rush of purchases by many users since its launch, and Huawei's sales of folding screen phones are expected to further increase in the future.
The company's products are expanded vertically, providing only MIM parts in the past, but now it focuses on providing customized development and production services of MIM parts + hinge components for folding screen phones, which greatly increases the value of the single machine and opens up the space for future growth.
Comments on the Development of 3:SMC Plate into the "Fast track"
The company reported that the main business income of the SMC plate reached 488 million yuan, an increase of 67.23% over the same period last year.
H1 in 23 years, through resource integration, the company has initially formed a multi-SMC production base situation of "clear division of labor, different characteristics and coordinated progress". The "annual production capacity of 60,000 tons of soft magnetic material industry base project" built by the company in Linqu, Shanxi Province is being accelerated. In addition, the construction of the SMC production line in Ningbo headquarters has also achieved preliminary results, and some high-end SMC products have been supplied in small quantities. At the same time, the company has accelerated the research and development of new materials and equipment for SMC, realized the reengineering of key processes and processes, improved product quality, and laid a solid foundation for the technological upgrading and long-term development of SMC technology platform.
Profit forecast
As the leader in the field of powder metallurgy in China, packs, MIM and SMC belong to the manufacturing branch of powder metallurgy of new materials. In the future, the three plates are expected to achieve re-integration and effective grafting, customers are expected to achieve further coordination, and the three major businesses in the medium and long term are expected to achieve the effect of "1 # 1 # 1 > 3".
We expect the company to achieve operating income of 39.5,51.7 and 6.14 billion yuan in 23-25 years, an increase of 5.9%, 31.1% and 18.7% over the same period last year, and a net profit of 1.9,2.8 and 380 million yuan, an increase of 24.0%, 47.1% and 34.8% over the same period last year, corresponding to PE 37, 25 and 19 times. Maintain the company's "buy" rating.
Risk hint
1) the prosperity of the photovoltaic industry is not as expected; 2) the expansion progress of the SMC plant is not as expected; 3) the folding screen business is not as expected.