Incidents:
1) Incident 1: On January 23, according to the company's official WeChat, recently, Jiaocheng ultrasonic composite fluid collector ultrasonic roller welding machine obtained an agreement from the head lithium battery factory.
2) Incident 2: On January 22, the company announced plans for directors and core employees to increase their shareholding in the company, with a total increase of not less than RMB 5 million.
Core views:
The industrialization of composite fluid collectors continues to advance, and the industry has officially begun mass production. At present, the composite fluid collector has completed a closed loop in the entire industry chain from the vehicle side to the equipment side. ① Vehicle side: According to Gaogong lithium batteries, composite fluid collectors, or fluid collectors that have been applied to the Cyrus Q M9 model launched in December 2023, Jinmei supplies Ningde Kirin batteries. This is another case where the composite collector was “launched” domestically after the Jikrypton 009, the first model for mass production of Ningde Kirin Battery in April of this year, used a composite fluid collector; ② Material side: In October 2023, Putailai and the Ningde Era collaborated strategically on the composite copper foil fluid collection business; in December, large-scale production of Jinmei's 6μm composite copper foil was officially launched; Jinmei's MC products have now continued to receive orders from downstream customers and will begin mass supply in 2024; ③ Equipment side: This time, Jiaocheng won the composite point of the ultrasonic head battery factory, marking the establishment of a composite point for the composite head battery factory The entire fluid collector has been completed From the verification period to the introduction of mass production, 2024 is expected to begin the first year of mass application.
As a domestic leader in ultrasonic equipment, the company is expected to benefit as a priority. Composite collectors replace traditional fluid collectors, which require the addition of a pole-ear transfer welding process, which is an important process in the production and manufacturing process of composite collectors. The composite collector ultrasonic roller welding equipment independently developed by Jiaocheng Ultrasound has successfully solved the pain points of difficult and inefficient composite collector welding, provides a stable guarantee for the extreme ear transfer welding process, effectively helps large-scale mass production of composite fluid collectors, and is expected to benefit priority from the industrialization of composite fluid collectors.
An ultrasonic technology platform company enters semiconductor bonding equipment to help replace domestic products. The lead bonding machine is the “crown” of semiconductor packaging and testing equipment. It is a key device for connecting chips to leads, and accounts for a high proportion of all package bonding technologies. On a technical level, the welding accuracy of the bonding machine is calculated in microns, and the welding speed is fast, and there are extremely strict requirements for welding systems, precision machinery, software and hardware, machine vision, etc. Relying on the ultrasonic core technology platform accumulated over many years, Jiaocheng Ultrasound has successfully broken through aluminum wire bonding and copper wire bonding technology, achieved high-speed, high-precision, and high-compatibility automatic welding, and can monitor welding quality online. The product has been recognized by customers.
In terms of product layout, the company has now initially formed coverage of four series of products: ultrasonic terminal welders, pin ultrasonic welders, bonding machines, and ultrasonic scanning microscopes, which are expected to help replace domestic semiconductor bonding equipment.
Core employees increased their holdings in the company, demonstrating confidence in the company's long-term development. On January 22, the company announced that some directors, senior management and core technical personnel intend to increase their holdings of the company's shares through centralized bidding within 3 months from January 23, 2024, with a total increase of not less than 5 million yuan, of which Deputy General Manager Duan's total holdings will increase by no less than 1 million yuan, Director General and Financial Director Sun will increase their holdings by no less than 2 million yuan, and core technical staff Shi Zong will increase their holdings by no less than 2 million yuan.
Core employees increased their holdings in the company, demonstrating their firm confidence in the company's development prospects and recognition of the company's long-term investment value, which is beneficial to boosting investor confidence.
Investment advice:
Due to structural overcapacity in the power battery industry, and the company's investment in R&D expenses suppressing profit performance and lowering the company's profit forecast, we expect the company's revenue for 2023-2025 to be 6.30, 8.22, and 1,216 billion yuan respectively, with year-on-year growth rates of 20.64%, 30.35%, and 48.00%, respectively, and net profit of 1.16, 1.70, and 265 million yuan respectively. The corresponding valuations are 58X/40X/25X, respectively, based on 2024 PE 48X, with a target price of 68.08 yuan for 6 months, maintains a “buy-A” investment rating.
Risk warning: The industrialization of composite fluid collectors falls short of expectations, battery factory expansion falls short of expectations, market competition intensifies, and the company's new product development progress falls short of expectations.