Key points of investment

On Friday (January 5), a GEM listed company “Belon Precision” subscribed. The company used pricing to issue it, and the issue price was 21.46 yuan.

Belon Precision (301567.SZ): The company is mainly engaged in R&D, production and sales of precision structural parts. Its products are mainly used in smart phones, wearable devices, smart housing and automotive electronics industries. The company achieved revenue of 253 million yuan/335 million yuan/350 million yuan respectively in 2020-2022; YOY was 2.51%/32.72%/4.37%, and the three-year compound annual growth rate of 12.40%; net profit to mother was 52 million yuan/56 million yuan/61 million yuan, YOY was -8.87%/7.67%/8.36%, and the compound annual growth rate of net profit for the three years was 2.07%. In the latest reporting period, 2023Q1-3 achieved operating income of 269 million yuan, a year-on-year decrease of 3.77%, and net profit to mother of 43 million yuan, a year-on-year decrease of 19.17%. According to the company's preliminary forecast, net profit is expected to increase by 0.72% to 4.02% year-on-year in 2023.

Investment highlights: 1. The company makes precision structural products related to deep optics and focuses on major customer strategies. It is the top two suppliers of similar products such as Shunyu Optics and Amphenol. There are many types and ranges of precision structural parts products, and the company makes deep optical precision structural parts products. The main products include precision structural parts related to smartphone cameras, precision structural parts for security lenses, precision structural parts for automotive lenses, etc. At the same time, the company focused on the big customer strategy. Shunyu Optics and Amphenol were the core sources of the company's revenue during the reporting period. In addition, the company also became an important supplier to customers such as Hikvision and Dahua Co., Ltd.; among them, Shunyu Optics ranked first in the world in terms of market share of automotive lenses and mobile phone lenses for many years, and the market share of mobile phone camera modules has continued to rank first in the world since 2021. The company has cooperated with Sunyu Optics for 15 years and occupied second place in its procurement ranking; another important customer, Amphenol, is also one of the world's largest technology interconnection, sensor and antenna solutions providers. In its class Ranked in the top two in product procurement. 2. The company actively develops new customers, and has also developed a new business direction based on optical structural components, and has achieved initial results. 1) On the basis of core customers, the company actively expands major customers such as Samsung Electric, TDK Group, Yilisu (a Japanese listed company, an internationally renowned manufacturer of electronic connectors), Zhejiang Fangzheng Motor, and Nidec Auto Motor (Zhejiang). Currently, the company and Samsung Electric have entered the stage of substantial cooperation. The transaction scale is expected to reach 30 million yuan in 2023, and achieve sales revenue of about 20 million yuan in the same year or to the TDK Group and its industrial chain. 2) The company is actively expanding its business field. Currently, it has reached cooperation with customers in smartphone VCM motor parts, new energy vehicle parts, etc., and the company continues to develop new products. In the research project, “Mold development and injection molding process development for automotive micro gearbox structural parts” plans to develop a production solution for micro gearboxes (for automotive micromotor systems).

Comparison of listed companies in the same industry: The company focuses on R&D, production and sales of precision structural parts products. Based on the similarity of main business, Yunzuka Technology, Dingtong Technology, and Changying Precision were selected as comparable listed companies of Belon Precision. Looking at the comparable companies mentioned above, the average revenue scale of the Q1-3 industry in 2023 was 3,555 billion yuan, the comparable PS-TTM (excluding outliers and arithmetic average) was 7.29X, and the gross sales margin was 22.10%; in comparison, the company's revenue scale was lower than the industry average, but the gross sales margin was higher than the industry average.

Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.