The company is a leading supplier of ultrasonic equipment and automation solutions in China. It has been deeply involved in the field of ultrasonic equipment for a long time, leading the localization process of ultrasonic equipment, and pioneered ultrasonic roller welding equipment that can be used in composite fluid collection mass production lines with technical advantages. As composite collectors enter mass production applications, the company's first-mover advantage is clearly expected to fully benefit. Furthermore, the company's automobile wiring harness and IGBT ultrasonic welding equipment volume will further open up room for growth, coverage for the first time, giving the company an “increase in ownership” rating.
Key points to support ratings
Leading domestic ultrasonic equipment, leading domestic substitution to continuously build technical barriers. Shanghai Jiaocheng Ultrasonic Technology Co., Ltd. was founded in 2007. Since its establishment, it has been committed to the R&D, design, production and sales of ultrasonic industrial application products. From the rubber tire cutting market to the power battery ultrasonic welding market, it has expanded its business to non-woven welding, wiring harnesses, semiconductors, medical and other fields, leading the localization process of ultrasonic equipment. It was officially listed on the Science and Technology Innovation Board in September 2022, and is the first domestic ultrasonic equipment stock. Currently, the company's products cover categories such as ultrasonic welding, cutting, power battery manufacturing automation, and accessories. In 2018-2022, the company achieved rapid growth, with a compound growth rate of 48.08% on the revenue side and a compound growth rate of 47.03% in net profit.
The large-scale application of composite fluid collectors is imminent, and new lithium battery technology is nurturing new demand. Ultrasound has a wide range of applications, especially in the multi-layer pole ear welding process for lithium-ion batteries. With stable product quality, leading technical capabilities and rapid service feedback, the company took the lead in breaking the foreign monopoly situation, entering the supply system of leading battery manufacturers such as Ningde Era and BYD, and achieved a market share of more than 50%. Recently, composite collectors have received a great deal of attention from the industry because of their high safety and high specific energy. Currently, they are in the final stage before large-scale mass production. The ultrasonic roller welding equipment for power batteries independently developed by the company can effectively solve the pain points of difficult and inefficient composite collector welding, and effectively help mass production applications of composite collectors. We expect that the mass production application of composite fluid collectors in the next two years will bring about 1-2 billion yuan of incremental space for ultrasonic welding equipment.
Build an application platform for ultrasound technology, and expand applications in various fields to bring new impetus for growth. The company has fully mastered the six core technologies, including ultrasonic power supplies, etc., and has the ability to expand applications in different industries. It can develop various types of ultrasonic equipment and accessories that meet application requirements according to the needs of different downstream industries. At present, the company has received orders for automotive wiring harnesses and IGBT ultrasonic welding equipment. Horizontal expansion in various fields will open up a lot of room for growth for the company.
valuations
We expect the company's revenue in 2023-2025 to be 616/8.26/1,203 million yuan, net profit of 1.17/1.67/233 million yuan, EPS of 1.02/1.46/2.03 yuan, and corresponding PE of 75.1/52.4/37.6 times. As the leading ultrasonic equipment in China, the company is expected to fully benefit from the large-scale industrial application of composite fluids. In addition, the company's automotive wiring harness and IGBT ultrasonic welding equipment will further open up room for growth, considering the scarcity of the company and Growth, covered for the first time, gave an increase in holdings rating.
The main risks faced by ratings
The risk that the growth rate of the downstream power battery industry will slow down or decline; the risk that the industrialization of composite fluid collection will fall short of expectations; the risk that the expansion of new fields will fall short of expectations; and the risk of increased competition.