A high-quality PCB company that focuses on automotive and landscape storage tracks. The company's main PCB products are widely used in automotive electronics, home appliances, industrial control, communications and other fields. In the first three quarters of 2023, PCBs used in the automotive and wind storage business together accounted for 61.20% of the company's total revenue. The company has been operating steadily for nearly 40 years and has been certified by leading international brands such as Panasonic, Tesla, Mitsubishi, Bosch, Dyson, and Xinsi. The company has achieved steady revenue growth for the past ten years. In 2012-2022, revenue increased from 1,093 billion yuan to 4.432 billion yuan, with a CAGR of 15.02%; the first three quarters of 2023 achieved revenue of 3.349 billion yuan, +0.18% over the same period last year.
Connect to new energy vehicle leaders to support the company's performance. The company expanded into the field of new energy vehicles in 2012. R&D results include high-precision PCBs for general control systems for new energy vehicles, 77GHz millimeter-wave radar PCBs for autonomous driving, 4D high-precision millimeter-wave radar PCBs, and autonomous driving data center server PCBs. The company has accumulated many high-quality customers in the automotive PCB field, such as Tesla/BMW/VW/Porsche/Chrysler/Mercedes/Xiaopeng/GAC/Great Wall, etc. According to the company's announcement, Tesla has been the company's largest automotive terminal customer since 2019, and in 2021, the company signed a procurement and supply agreement with it to handle supporting supply for the commissioning of its new plant. According to the Passenger Federation, the year-on-year sales growth rates of Tesla Motors in 2021 and 2022 were 87.4% and 40.4%, respectively, and the company's related business volume also maintained rapid growth in line with this.
Wind and solar storage, servers, robots, etc. are leading the company to a new level. While consolidating its dominant business position, the company has vigorously expanded PCB products related to wind and solar storage and servers, and has made good progress. According to the company's announcement, as Tesla's main PCB supplier, in addition to providing NEV PCB products, the company has entered its supply chain for new products such as photovoltaics and energy storage based on the same technology development. Among them, the overseas energy storage supply for customers began mass production in 2021/4, and the supply is currently stable; it is also closely connected with the customer's Shanghai energy storage plant, and the supply time is expected to be the same as the customer's planned commissioning time.
Investment advice: The company focuses on new energy vehicles and continues to explore domestic and foreign markets. We have obtained fixed-point projects such as smart cockpits, autonomous driving, and body domain controllers from many customers. We expect the company to achieve operating income of 44.70/50.26/5.712 billion yuan and net profit to mother of 4.98/5.655 billion yuan in 2023-2025. The corresponding PE was 22.70/20.02/17.28 times, respectively. It was covered for the first time, and a “gain” rating was given.
Risk warning: Risks such as downstream demand falling short of expectations, exchange rate risk, and increased industry competition.