Events:
The company released its quarterly report for 2023, with operating income of 3.349 billion yuan in the first three quarters, an increase of 0.18% over the same period last year, and a net profit of 374 million, an increase of 25.6% over the same period last year. 23Q3 achieved an operating income of 1.198 billion yuan in a single quarter, an increase of 5.01 percent over the same period last year, and a net profit of 178 million yuan, an increase of 8.39 percent over the same period last year.
With two-wheel drive at home and abroad, the company has a sound business development:
The company has deeply cultivated the PCB industry for many years and has accumulated a large number of high-quality and stable overseas customer resources, which provides a good foundation for the company to open up the market. The 23 semi-annual report revealed that the company has actively expanded overseas markets and successfully passed the certification of Samsung and other customers. Sharp, Konica Minolta, Amfino and other customer products have achieved mass production. In the domestic market, the company actively introduces automobile terminal customers, and the semi-annual report reveals that the company's NIO Inc. intelligent cockpit project has been designated and entered into mass production supply, and the autopilot project has been fixed. The ideal autopilot and body domain controller project has been designated, and the SAIC Honda vehicle communication module project has been designated, and has passed the Baidu, Inc. autopilot certification to actively develop the self-driving market. The company takes the new energy vehicle as the focal point, develops the domestic and foreign market unceasingly, the management development is steady. The third quarterly report revealed that in the first three quarters, the company achieved operating income of 3.349 billion yuan, an increase of 0.18% over the same period last year, and a net profit of 374 million, an increase of 25.6% over the same period last year.
New applications such as autopilot and AI open up new markets in the industry:
At present, the PCB industry is in a trend of short-term fluctuations and long-term growth. According to the company's semi-annual report, Prismark expects global PCB output to reach US $98.388 billion in 2027, with a compound growth rate of 3.8% from 2022 to 2027, among which China's PCB output is accelerating. With the development of intelligent automobile technology (including autopilot and intelligent network connection) in the future, the demand for high-frequency and high-speed PCB will continue to increase. At the same time, the high demand for computing power of AI servers has higher requirements for PCB materials, layers and processing technology, which will become an important field to drive the growth of downstream demand in PCB industry. The semi-annual report revealed that the company has made progress in developing high-frequency, high-speed, high-level and high-level PCB business, and mass production has been achieved in high-level, multi-layer and ultra-low-loss PCB, such as cloud data center, AI big computing module, edge computing and so on.
Obvious advantages in the field of automotive electronics, high-quality customer resources:
According to the semi-annual report, the company has accumulated a large number of high-quality and stable customer resources, such as Tesla, Inc. (Tesla), Panasonic (Panasonic), Mitsubishi (Mitsubishi), Bosch (Bosch), Dyson (Dyson), Synaptics (New thought), Abbott (Yatta), Insulet and other internationally renowned end customers in automotive and consumer electronics, medical and other industries. The company takes the lead in the layout of the automotive field, has achieved 24-layer hard board, 5-stage HDI (including any layer interconnection), 6oz thick copper multilayer plate, multi-layer soft board, multi-layer HDI soft and hard version of mass production, successfully entered the intelligent driving and self-driving market, and Tesla, Inc. (Tesla) and other global leading new energy vehicle terminal customers to establish long-term cooperation. The company has increased its research and development of materials resistant to high current and voltage, high reliability, high density, high heat dissipation, high frequency and high speed. The R & D achievements include high precision PCB for general control system of new energy vehicles, PCB of self-driving 77GHz millimeter wave radar, 4D high precision millimeter wave radar PCB and self-driving data center server PCB, and actively promote the landing of new products such as 5G communication routers PCB, PA and AAU base station PCB. To achieve the goal of one-stop high-end line board end-to-end solution service.
Investment suggestion: we estimate that the company's income from 2023 to 2025 will be 5.008 billion yuan, 5.895 billion yuan and 7.029 billion yuan respectively, and its net profit will be 502 million yuan, 621 million yuan and 810 million yuan respectively. The target price for six months is 19.82 yuan, corresponding to a price-to-earnings ratio of 21 times 2023. "Buy-A" investment rating for the first time.
Risk tips: the prosperity of the industry is not as good as expected; product development is not as expected; market development is not as expected.