The company is deeply involved in the field of electronic components and accessories, and is the drafter of industry standards. Since its establishment, the company has successfully developed rubber sealing plug products for aluminum electrolytic capacitors, obtained replacement import certification, and undertook the drafting of industry standards.

The company is one of the earliest domestic enterprises to develop and produce rubber seals for aluminum electrolytic capacitors. It is the drafting unit for the industry standard “SJ/T10242-91 Technical Conditions for Rubber Seals for Aluminum Electrolytic Capacitors”.

The company has outstanding technical advantages in the electronic component parts industry and maintains long-term stable cooperation with leading downstream enterprises. The company's new products are 150℃ high temperature long-life rubber seals, rubber seals for supercapacitors, rubber seals for UHV capacitors above 550V, axial capacitor rubber rings+aluminum covers, high-end general purpose products resistant to UHV and high and low voltage, lithium battery rubber plugs, and supercapacitor rubber plugs, etc. have been successfully developed and widely used.

The company has formed long-term stable cooperation with world-renowned capacitor companies such as Nijikang (Japanese), Sanying (Korean-owned), Lilong (****), Aihua Group, and Jianghai Co., Ltd., and its products are widely used in aerospace, automobiles, smart electronics, etc.

Downstream demand for electronic components and accessories has exploded, and the future can be expected. Under the trend of carbon neutrality, the new energy industry represented by photovoltaics, wind power, and new energy vehicles ushered in a rapid explosion, and demand for aluminum electrolytic capacitors ushered in explosive growth, becoming a new driving force for upstream rubber plugs, covers, and bases. According to the Forward-looking Industry Research Institute, the market size of aluminum electrolytic capacitors in China will be about 29.3 billion yuan in 2020. It is estimated that by 2026, the market size of aluminum electrolytic capacitors in China will reach 47 billion yuan.

Investment advice: We expect the company to achieve operating income of 643 million yuan, 727 million yuan and 849 million yuan respectively in 2023-2025, and realized net profit of 76 million yuan, 88 million yuan, and 101 million yuan respectively, an increase of 14.9%, 15.1%, and 15.2% over the previous year. The corresponding EPS is 0.31 yuan, 0.36 yuan, and 0.41 yuan respectively. The PE multiples corresponding to the current stock price are 41X, 36X, and 31X, respectively. Considering the growth space of the company's rail transit industry and electronic component parts industry, and the company's layout results in the upstream new materials field have already been shown, a certain valuation premium has been given to maintain the “buy” rating.

Risk warning: Risk of rising raw material prices, risk of increased market competition, risk of downstream industry development falling short of expectations, risk of railway construction falling short of expectations, risk of urban rail transit construction falling short of expectations.