风华高科入选中国电子元件行业骨干企业及国务院国资委创建世界一流专业领军示范企业名单，核心产品MLCC、片式电阻器均为“国家级制造业单项冠军产品”。风华高科主营MLCC、片式电阻器、电感器、压敏电阻器、热敏电阻器、铝电解电容器、圆片电容器、陶瓷滤波器、超级电容器等，广泛应用于包括汽车电子、通讯、消费电子、工业及控制自动化、家电、PC、物联网、新能源、医疗等领域。另外，公司电子功能材料产品包括电子浆料、瓷粉等。风华高科连续26 年入选中国电子元件百强。Key points of investment:
2024 Interim Report: Revenue of 2.391 billion yuan, +15.18% YoY, net profit to mother 0.207 billion yuan, +143.62% YoY. Production and sales of 2024H1's main products increased by 39.37% and 40.91%, respectively. The interim report was in line with expectations.
24Q2 revenue was 1.333 billion yuan, +16.73% year-on-year; gross profit margin was 22.39%, QoQ 5.8pct, a significant recovery.
Fenghua Hi-Tech was selected as a key enterprise in China's electronic components industry and a world-class professional leading demonstration enterprise list created by the State Council's State-owned Assets Administration Commission. The core products MLCC and chip resistors are all “national manufacturing individual champion products”. Fenghua Hi-Tech specializes in MLCCs, chip resistors, inductors, pressure sensitive resistors, aluminum electrolytic capacitors, wafer capacitors, ceramic filters, supercapacitors, etc., which are widely used in automotive electronics, communications, consumer electronics, industrial and control automation, home appliances, PC, Internet of Things, new energy, medical and other fields. In addition, the company's electronic functional materials products include electronic paste, porcelain powder, etc. Fenghua Hi-Tech has been selected as one of the top 100 electronic components in China for 26 consecutive years.
R&D accelerates breakthroughs in high-end products. 1) Breaking through many key technologies for high-end products. Vehicle resistance and capacitive sensing product technology continues to break through, and materials supplied by major customers continue to increase. Among them, vehicle coaxial transmission (PoC) inductor technology has made breakthroughs; drone application technology has continued to expand, and a series of products such as integrated inductors, 01005 ultra-miniature inductors, alloy resistors, and MLCC have been launched. 2) The product yield and core strategic customer code product yield of the Xianghe Project increased dramatically, and the third phase of the Xianghe Project, which positions the industrial and high-end consumer markets, was officially put into trial production; the “monthly production of only 4 billion multilayer inductors” and “monthly production of only 0.1 billion integrated inductors” technical improvement and production expansion projects, which invested 0.6 billion yuan and were implemented in stages, completed the project and started project construction.
Adjust profit forecasts and maintain holdings growth ratings. Due to the slow recovery in market demand and the company bucking the trend and expanding production, net profit due to 2024-2025 was lowered from 0.5/0.65 billion yuan to 0.44/0.59 billion yuan, and the 2026 net profit forecast of 0.71 billion yuan was added. MLCC and materials industry comparable companies related to the company's business (Aerospace Caihong, Boqian New Materials, Jiemei Technology) were selected to average PE 29x in 2025, 17% higher than the company's 2025 PE 25x, maintaining an increase rating.
Risk warning: 1) MLCC demand growth falls short of expectations 2) mass production progress of high-end products falls short of expectations, etc. 3) Litigation cases:
Fenghua Hi-Tech received relevant materials such as the “Summons”, “Notice of Response”, “Notice of Evidence” and “Application for Additional Litigation” from the Mianyang Intermediate People's Court of Sichuan Province on November 17, 2023 and March 22, 2024, respectively. The Mianyang Intermediate People's Court of Sichuan Province handled the contract dispute between Sichuan Changhong Network Technology Co., Ltd. against the company. The company has accrued estimated liabilities of 26,829,800.00 yuan and 18,537,410.50 yuan for the above contract disputes in 2022 and 2024, respectively. The cumulative estimated liabilities of 45,367,210.50 yuan have been accrued, which is consistent with the amount of compensation the company should pay to Changhong Network as confirmed by the court. The settlement of this settlement will not have a significant adverse impact on the company's profit after the period.
