Bozhong Seiko: Leading domestic 3C automation equipment, production line upgrade+MR volume driving steady growth 1) Apple production line upgrade: Bozhong Seiko is a leading domestic 3C automation equipment leader. Since 2010, it has gradually expanded from the smartphone business to segments such as tablets and TWS Bluetooth headsets, completing the horizontal and vertical business expansion from mobile phones to 3C, from complete machines to components. The product matrix is diverse. Customer resources are excellent. In recent years, Apple and its designated EMS vendors have accounted for more than 70% of the company's revenue. Demand for Apple's production line transfer+production line upgrade is strong. Bozhong Seiko's flexible modular production line is a key part, which strongly drives the company's 3C business growth.
2) MR starts the first year of spatial computing: Apple Vision Pro is a revolutionary spatial computing device.
By analogy, Mac brings users into the era of personal computing, and iPhone brings users into the era of mobile computing. We believe Apple Vision Pro is expected to lead users into the era of spatial computing. With the opening of the Blue Ocean market, investment in equipment is the first. Bozhong Seiko is deeply involved in the assembly of first-generation MR product lenses and complete machines, as well as the prototyping of second-generation product production equipment, and is expected to benefit from the wave of spatial computing.
The semiconductor sector is strategically forward-looking, and the localization process brings new development opportunities.
The company has a product layout in the field of high-end semiconductor equipment, mainly used in chip packaging and appearance inspection, from back-end packaging testing equipment to the field of wafer AOI inspection in the future. The company's Xingwei series of high-precision eutectic mounters are used in the field of back-end processes. They are high-precision and high-efficiency multi-function chip placement equipment, which is in synergy with advantageous 3C businesses. The localization rate in the 3D AOI inspection field is only 10 to 20%, and the domestic market size in related fields continues to expand due to domestic automation trends, bringing new development opportunities to the company.
Lithium battery equipment has received resources from leading customers, and power exchange equipment has continued to make breakthroughs.
In terms of lithium battery equipment, liquid injection machines and high-speed all-in-one machines for key equipment in the middle have significant advantages. The company's lithium battery equipment received resources from leading customers. The company began cooperation with lithium battery manufacturers such as Desai Battery and Sunwoda in 2019, and gradually expanded to customers such as ATL, Ningde Era, Putailai, and Taipu Power.
In terms of power exchange equipment, the company's intelligent charging and switching station equipment covers passenger cars and commercial vehicles, and the self-supply rate of products related to smart charging and switching stations is as high as 80%. The company's products are used in a wide range of scenarios, and the first-mover advantage is obvious. At present, the company has developed customers such as Ningde Era, SAIC Motor Group, GAC Group, and NIO Auto.
Profit forecasting and valuation model:
Bozhong Precision is expected to achieve net profit of 3.55, 5.64, and 715 million yuan in 2023-2025, respectively, and PE of 29.59, 18.62, and 14.67 times, respectively. Bozhong Seiko is the leading domestic 3C equipment leader, benefiting deeply from Apple's production line upgrades and the wave of spatial computing brought by MR. Furthermore, the new energy, semiconductor, and core components sectors have opened the ceiling for growth, and there is considerable room for future growth. We gave Bozhong Seiko 28 times PE in 2024, corresponding to a target market value of 15.79 billion yuan and a target price of 35.34 yuan/share for the first time.
Risk warning: increased market competition, high concentration of downstream industries, high customer concentration, risk of macroeconomic changes, risk of gross margin fluctuations