Description of the event
The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 909 million yuan, a year-on-year decrease of 10.13%; net profit to mother was 151 million yuan, a decrease of 29.01% year-on-year. 23Q4 achieved revenue of 178 million yuan, a year-on-year decrease of 45.83%; net profit to mother was 0.2 billion yuan, a year-on-year decrease of 96.5%. 24Q1 achieved revenue of 197 million yuan, a year-on-year decrease of 15.73%; net profit to mother was 31 million yuan, a year-on-year decrease of 38.72%.
Incident comments
Affected by weak demand in the PCB industry, the company's acceptance of vertical continuous electroplating equipment fell short of expectations, and revenue and profit declined in '23 and 24Q1. However, the company continued to introduce new equipment, forming a new matrix of the company's equipment products: in the PCB field, the first three-in-one horizontal plating device was successfully tested by customers, and thick copper products etched with horizontal DES wire were successfully verified by end customers; equipment such as ceramic electroplating and portable VCP focused on market segments, and market demand potential was continuously released; continuous hardware electroplating lines broke through environmental restrictions; the silicon wafer vertical continuous electroplating mass production line (PV8000H) was successfully shipped, breaking through the production capacity limit of the pilot line to achieve mass production; the 24-target magnetron sputtering equipment was successfully developed and verified within the factory Vacuum aluminizing equipment Start development.
High-end PCB demand release+Southeast Asia investment boom has arrived, and demand for electroplating equipment is picking up. The development trend of PCB technology is mainly reflected in miniaturization, advanced technology, flexibility and intelligence. Higher technical requirements will drive the continuous expansion of downstream application scenarios and investment layouts, and there is great potential for development; the PCB industry is experiencing a boom in investment in Southeast Asia. Currently, about 30 companies have set up or landed in Thailand, and demand for equipment is picking up. As an industry leader, the company continues to innovate in product development. Its customers cover almost all of China's top 100 comprehensive PCB companies in 2023, actively support downstream customers to invest in Southeast Asia, continuously strengthen its leading position in the global industry in the field of electroplating equipment, and continue to strengthen the company's brand influence and core competitiveness.
The industrialization of composite fluid collectors continues to advance. Composite aluminum foil has been used for loading, and orders have been converted in the market, and it is expected that it will be applied in batches to domestic and foreign markets in the future; the application of PP composite copper foil continues to advance, and it is expected that subsequent composite copper foil will gradually enter the mass production stage. Against the backdrop of the continued rise in copper prices, the cost reduction advantages of composite copper foil are further highlighted, and the subsequent industrialization process is expected to accelerate. The company is the only company in the world that has achieved large-scale mass production of composite copper foil equipment. At the same time, it has an obvious first-mover advantage. At the same time, it is actively deploying composite aluminum foil equipment, and is looking forward to the subsequent release of composite copper foil equipment.
The production base continues to increase, and the capacity to supplement subsequent production capacity is strong. The company's Guangde PCB vertical continuous electroplating equipment production expansion (phase I) project was completed, and the plant was built and put into use. The cumulative production plant area reached 100,000 square meters to better guarantee the production of vertical continuous electroplating equipment in the PCB field; the Kunshan Dongding Road vacuum plant project was built and has now been put into use, adding 10,000 square meters of plant area to the company, effectively increasing the company's production capacity in the new energy business; the Changshu high-end surface treatment equipment production base project began construction and is scheduled to be put into operation in June 2024. Better cope with future increases in orders in the field of general hardware surface treatment.
Maintain a “buy” rating. The PCB industry has bottomed out and rebounded, and the company's VCP business is expected to improve, and new products will also bring growth; the industrialization trend of composite fluid collectors is obvious, and it is expected that new progress will be ushered in in the future, and the company is expected to fully benefit as a leading manufacturer. The company's net profit due to mother in 2024-25 is estimated to be 205 million yuan or 317 million yuan, which is 50 or 32 times the corresponding PE.
Risk warning
1. The expansion of downstream composite copper foil production falls short of expectations;
2. The promotion of the company's new products and new business falls short of expectations.