Incident Overview
The company released its 2024 quarterly report, 24Q1 revenue of 4.423 billion yuan, yoy +17.77%, qoq +4.34%, net profit to mother of 392 million yuan, yoy +58.25%, qoq +47.92%, net profit after deducting non-return mother 386 million yuan, yoy +65.65%, qoq +55.02%; gross profit margin 21.3%, yoy+1.56pct, qoq+2.92pct, net profit margin 9.13%, yoy+2.67pct, qoq+2.98pc+2.98pc+t.
Orders were full in the first quarter, and structural optimization improved profit levels
The company's outstanding performance in Q1 was mainly due to relatively strong downstream demand and full orders in the first quarter, leading to an increase in the company's copper-clad plate production and sales, which led to a high increase in the company's revenue. Furthermore, the company continued to optimize the product structure and increase the share of high-margin products, which led to an improvement in the company's profit margin. At the same time, the subsidiary Shengyi Electronics 24Q1 also reversed losses, reducing the drag on the company's performance.
Looking ahead to Q2, the downstream sector will maintain a high level of prosperity, and the company's overall operating rate is expected to be maintained. At the same time, the company is expected to further optimize the product structure, and the company's market strategy will continue, and the product structure is expected to be further optimized.
Lay out new products to enhance one's own growth
In terms of growth, the company continues to develop high-growth new products, laying a solid foundation for the company's future growth, such as high-heat-resistant ultra-low loss copper-clad plate substrates for high-speed communications, high-density sealed board substrates, high-Tg high-heat-resistant copper-clad plate substrates for automotive electronics, and encapsulating tape substrates for dual-interface smart cards. In the future, as downstream demand picks up further and the upward cycle begins, the overall price of copper clad plates is expected to pick up, and the company's cycle+growth attributes are expected to bring about a double recovery in performance valuation.
Investment advice
Considering the current rise in demand, the copper-clad plate industry is expected to start an upward cycle, we expect the company's net profit to be 18.2/22.26/2,658 billion yuan in 2024/2026, respectively (previously estimated net profit to mother in 2024/2025 was 16.582.91 billion yuan). According to the 2024/4/26 closing price, PE is 22/18/15 times, maintaining a “buy” rating.
Risk warning
1. Downstream PCB demand falls short of expectations; 2. Raw material prices fluctuate; 3. New product release falls short of expectations; 4. Research report usage information is not updated in a timely manner