Incident: On November 10, the company announced that it had recently received the “Approval for Registration of Shenzhen Prince New Materials Co., Ltd. to issue shares to specific targets” issued by the Securities Regulatory Commission.
The company's fixed increase was approved by the Securities Regulatory Commission for registration approval, and the fixed increase plan went one step further. The company plans to raise no more than 999.7034 million yuan in total capital for distribution to specific targets, of which 691.359 million yuan will be invested in the Ningbo Xinrong film capacitor expansion and upgrade project, 583.44,400 million yuan will be invested in the CLP Huarui R&D center construction project, and 250 million yuan will be used to supplement working capital.
Capacitor product customer development is progressing positively, and a steady increase, if successfully implemented, is expected to break the bottleneck of bankruptcy and energy. The subsidiary Ningbo Xinrong, the predecessor of Ningbo Xinrong Capacitor Factory, founded in 1969, has drafted a number of national standards and industry standards. Capacitor products are widely used in new energy vehicles, military, photovoltaic wind power, power grids, rail transit, medical, home appliances, etc. Customers include Suzhou Huichuan, Dayang Electric, Wuhan Lingdian, Shanghai Electric Drive, Xiaopeng Huitian, Haier, Gree, Midea, Oaks, AIC Tech, SolarEdge, GE, and Wabtec.
After 22 years of controlling Ningbo Xinrong, the company actively promoted customers in the fields of new energy vehicles, photovoltaics, wind power, military industry, etc., and successfully developed new customers such as BYD, Zero Car, Sunshine Power, and Fisch. At present, many customers have completed factory inspections, such as: BYD, Sunshine Electric Power, CRRC Times Electric in the field of new energy vehicles, Goldwind Technology, Sunshine Power, Huichuan Technology in the photovoltaic/wind power field, and ABB in the field of industrial and power systems. The company currently has sufficient customer resources. If the fixed increase progresses smoothly, the problem of insufficient production capacity will be effectively alleviated.
Boost the electromagnetic emission industry and start the second growth curve. The company acquired CLP Huarui and Ningbo Xinrong to lay out the electromagnetic emission industry. CLP Huarui's high-power semiconductor components, electronic information systems, and Ningbo Xinrong's thin film capacitors can be applied to the three core links of electromagnetic emission: pulse energy change, control and monitoring, and pulse energy storage systems, respectively. CLP Huarui's customers include system verification units, general ship design units, professional research institutes, and related military production units. In recent years, it has pioneered the fields of aerospace, weapons, war support, etc., and has entered various types of scientific research and mass production support. In '22, CLP Huarui acquired Gauss in Chengdu and Anhejie in Wuhan, and entered the fields of military product testing and data chains respectively. The military business is expected to drive the company's continued growth.
Profit forecast, valuation and rating: Considering the slow downstream recovery of the company's main plastic packaging business and increased competition in the new energy film capacitor industry, we lowered the company's net profit forecast for 23-25 to 1.17, 1.79, and 253 million yuan (previous values were 1.81, 2.41, 319 million yuan). Prince New Materials has a deep layout in the two major fields of military electromagnetic emission and new energy thin film capacitors. It is expected that in the future, it will fully benefit from the rise of the electromagnetic emission industry and the wave of the new energy industry. Therefore, it will maintain its “buy” rating.
Risk warning: the risk of mergers and acquisitions integration, the risk of capital raising falling short of expectations, the risk of the electromagnetic emission industry not growing as expected, and the risk of changes in industrial policy.