Based on the 3C, relying on Apple, flexible lines and downstream innovation, it contributes new growth points.
The company started with 3C automation equipment, and the core was tied to Apple, a major customer. In 2017-2022, the company's consumer electronics business achieved revenue of 18.6/21.5/18.2/20.6/32.5/3.55 billion yuan respectively. Since 2019, it has achieved steady growth, mainly due to the company's continued competitive advantage in the consumer electronics field and adopting a “horizontal expansion and vertical expansion” strategy. We believe that the main growth points of the company's 3C automation equipment business are: 1) the flexible modular production line business launched in 2022 continues to grow, continuing to expand to other mobile phone process stages and other terminal products for major customers, and 2) contributing to incremental equipment demand for new products and applications such as MR from major customers. As Apple's continuous and stable supplier, the company will continue to benefit from major customer product changes.
Expand horizontally, lay out new energy exchanges/semiconductors, and build a multi-dimensional growth pole.
New energy: Relying on deep underlying technology accumulated in the 3C field, we strategically lay out standard equipment for lithium battery manufacturing, intelligent charging and switching stations, and automotive automation equipment. In 2020-2022, the company's new energy business achieved revenue of 2.8/3.6/940 million yuan respectively, with a significant increase of 160% over the same period in 2022.
Looking forward to the future, 1) the domestic lithium battery equipment market is under relative pressure, but the penetration rate of overseas new energy vehicles is still low, and the company is developing the overseas incremental market; 2) Ningde Era released the self-developed heavy truck chassis power exchange solution “Qiji Power Exchange”. The heavy truck power exchange business model is becoming more mature, and the company is expected to benefit deeply from the construction of heavy truck power exchange trunk lines; 3) The automotive automation equipment market space is broad, and the company is gradually breaking through the layout of core processes such as rotors and stators for new energy flat wire motors.
Semiconductors: At present, the company's high-precision eutectic chip mounters have been mass-produced and delivered to the field of optical modules; two other products, high-speed high-precision crystallizers and AOI equipment for chip appearance inspection, are also being successfully developed.
Vertical expansion, layout of upstream core components, consolidation of underlying technology collaborative development. Spirit Monkey Company was established in 2015 to lay out the two major fields of servo transmission and machine vision. The products cover software and hardware products such as industrial robots, vision systems, special lenses, direct drive motor systems, etc., and most of the core products have entered the core supplier list of major international customers. In 2022, Spirit Monkey achieved revenue of 240 million yuan and net profit of 4.56 million yuan, of which external sales revenue was 106 million yuan, accounting for 45.32%. In the future, core components and the company's automation equipment business are expected to continue to develop collaboratively.
Investment advice:
We expect the company to achieve revenue of 48.5/63.2/7.59 billion yuan in 2023-2025, an increase of 0.80%/30.31%/20.09% year-on-year; in 2023-2025, net profit to mother of 4.11/6.26/ 762 million yuan, respectively, an increase of 24.1%/52.3%/21.7% year-on-year.
Saiten Co., Ltd., JP, Tianzhun Technology, Smart Cube, and Hanchuan Intelligence were selected as comparable companies. The corresponding average PE for 2023-2025 was 30.30/21.28/15.67; taking into account the company's leading position in the 3C automation field, we gave the company a valuation of 25xPE, corresponding to a target price of 35.06 yuan for 6 months, maintaining a “buy-A” rating.
Risk warning: Consumer electronics recovery falls short of expectations; risk of major customer Apple falling short of expectations; risk of MR sales falling short of expectations; risk of falling short of expectations in promoting new products such as semiconductors; risk of falling short of expected risk of profit forecasting.