Incidents:
Taijia recently announced that the company plans to jointly sign the “Equity Transfer Agreement on Dongguan Botai Electronics Co., Ltd.” with Shanghai Huiyi, Zhang Qihua, Li Zhenxu, Jin Lei, Yang Lan, and Zheng Ganghai. After completing the sub-share acquisition of 36.51% of the shares held by the transferor totaling 120 million yuan, the company's direct shareholding ratio in Platai Electronics will increase to 92.74%.
Lay out the server power supply, and high power opens the second growth curve. (1) Luoding Yada, the holding subsidiary of the company, was established by Yada Energy in 1995. Since its establishment, it has focused on power products. It has nearly 30 years of experience and industry accumulation. Historically, it is a wholly-owned subsidiary of Emerson in the US, a leading company in the global power supply industry. Currently, the company's power supply business has three manufacturing bases: Luoding in Guangdong, Dalingshan in Dongguan, and Xiegang in Dongguan. It focuses on large-scale manufacturing of products in the power supply industry. The Guangdong Luoding base has an annual production capacity of up to 160 million chargers, with a cumulative global shipment volume of more than 2 billion.
(2) Since the second half of 2023, the company has begun to actively start production of industrial and commercial new energy intelligent photovoltaic power supplies, data center power supplies, site energy power supplies, etc. The above production lines are expected to complete infrastructure construction in the first quarter of 2024. Currently, some of the production lines that have already been put into operation are also in the process of climbing production capacity, and there are sufficient orders for high-power power supplies.
The gross margin of sawing remains high, and domestic+foreign strategies are being developed collaboratively. (1) Taijia is a leading manufacturer of bimetallic band saw blades. It is a qualified supplier of hard alloy band saw blades approved by China Aerospace China Launch Vehicle Technology Research Institute. The bimetallic band saw blade business is the company's basic plate business, and 2023H1 accounts for 33.6% of revenue. By the end of 2023, we believe Taijia's market share in the bimetallic band saw blade industry was close to 35%. (2) The bimetallic band saw blade remained highly profitable. The gross margin of the bimetallic band saw blade of the 2023H1 company reached 41.6%, +3.59pct compared to the previous year. (3) Actively layout overseas markets. In 2023, H1's export sales revenue was 94.6,168 million yuan, accounting for 29.35% of sawing revenue, accounting for an increase of 0.96pct. Taiga strategically took a stake in AKG, a century-old German company, established Dutch and Indian subsidiary companies, established a relatively complete channel system for many years, and also had exclusive brand agents or brand agents in Canada, New Zealand, Japan, South Korea, Vietnam, Singapore and other places.
Profit forecast: High-margin sawing business opens up overseas markets, and high-power power supply production capacity is implemented. We expect the company's revenue for 2023-2025 to be 20.0/ 25.0/ 2.70 billion yuan, and the net profit to mother for 2023-2025 will be 1.45/ 2.24/ 286 million yuan respectively, and the corresponding PE will be 38/25/ 19, respectively. The profit of 2024E was estimated at 30 times PE, corresponding to the target price of 26.7 yuan. It was covered for the first time, and a “buy” rating was given.
Risk warning: profit forecasting and valuation models fall short of expectations; implementation of high-power power supplies falls short of expectations