Key points of investment

Next Tuesday (May 28), a new GEM stock “Li An Technology” will be purchased. The issue price is 28.30 yuan, and the price-earnings ratio is 22.40 times (the issuance price per share is divided by earnings per share, and the earnings per share are calculated by dividing the net profit before and after deducting non-recurring profit and loss in 2023, divided by the total share capital after the current issuance).

Li An Technology (300784): The company is mainly engaged in R&D, production and sales of injection molding products and precision injection molds. It is a professional precision manufacturing enterprise integrating product industrial design, precision mold design, manufacturing, injection molding, spraying and assembly. In 2021-2023, the company achieved operating income of 468 million yuan/491 million yuan/469 million yuan respectively; YOY was 7.50%/4.84%/-4.36%; realized net profit to mother 67 million yuan/79 million yuan/76 million yuan, and YOY was -5.01%/18.04%/-4.43% in that order. In the latest reporting period, from January to January 2024, the company achieved operating income of 113 million yuan, an increase of 10.87% over the previous year, and realized net profit of 0.18 million yuan, an increase of 1.01% over the previous year. According to the company's management's preliminary forecast, the company expects to achieve operating income of 221.2799 million yuan to 244.5725 million yuan from January to June 2024, an increase of 5.55% to 16.66% over the same period of the previous year, and is expected to achieve net profit to mother of 29.72.30 to 32.8518 million yuan, an increase of 0.61% to 11.20% over the same period last year.

Investment highlights: 1. The company is one of the few domestic manufacturers with “integrated molding” scale production capacity, and is deeply tied to Logitech Group, a global leader in computer peripherals. The company has been deeply involved in the field of injection molding for more than ten years, and has gradually become a large-scale “molding integration” enterprise in China. It has strong comprehensive market competitiveness, and has entered the supply chain of well-known domestic and foreign companies such as Logitech Group and Spin Master. Among them, Logitech Group is a world-famous supplier of cloud peripherals, and its business covers various fields of e-sports gaming, video collaboration, music, and smart home; according to Morgan Stanley statistics, Logitech Group's gaming mice and wireless gaming mice accounted for 45% and 70% of the market share respectively in 2021. Since the company cooperated with Logitech Group in 2008, the cooperation between the two sides has had a strong breadth and depth. During the 2021-2023 reporting period, the company provided injection molding products and precision injection molds for the Logitech Group and its suppliers, achieving sales revenue of 328 million yuan, 317 million yuan, and 285 million yuan respectively, which basically accounted for more than 60% of the company's current revenue; according to the company's inquiry letter, the company's share of Logitech Group's total procurement of injection molded parts has always remained between 10% and 15%, and is the only supplier of some categories of injection molding products; in 2023, the company continues to participate in the supply of new categories of Logitech Group products. It has become a supplier of shell injection molding products for the two new mouse models, the S6324 and S8735, and is currently in the process of developing a mold. 2. The company continues to implement the big customer strategy and actively explore new customers. In 2022, the company began to supply panel case kits to Ningbo Shengwei Excellent Safety Equipment Co., Ltd., supply injection molding products for automobile interiors and exteriors to Bussan Zhongda Group, supply air conditioning panels to Wuhu Meizhi Air Conditioning Equipment Co., Ltd. (a subsidiary of Hisense Home Appliances) and Hisense (Zhejiang) Air Conditioning Co., Ltd. (a subsidiary of Hisense Home Appliances), supply purifiers to Anhui Kunhe Intelligent Technology Co., Ltd. (a joint venture of Haier Smart Home Appliance), supply bead wire woven toys, etc. to Make ItReal LLC. The project began entering the field of electric vehicles; as of September 2023, on-hand orders from these new customers exceeded 90 million yuan.

Comparison of listed companies in the same industry: Based on the similarity of main business, Yokogawa Precision, Tianlong Co., Ltd., Shanghai Yahong, Shuanglin, Weike Technology, and Zhaomin Technology were selected as comparable listed companies of Li'an Technology.

Looking at the comparable companies mentioned above, the average revenue of comparable companies in 2023 was 1,437 billion yuan, PE-TTM was 36.88X, and gross sales margin was 24.10%. In comparison, the company's revenue scale was less than the average of comparable companies, and the gross sales margin was in the middle to high range of the same industry.

Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.