[Core conclusion] The company's net profit for 2024-2026 is estimated to be 0.629/0.85/1.092 billion yuan, respectively, and the current market value corresponding to PE is 21.98/16.27/12.66 times, respectively. Electric connection technology is a leading domestic connector manufacturer. RF connectors in the consumer electronics field are in a leading position in China. At the same time, the BTB product business has gradually matured after years of cultivation, and is expected to maintain rapid growth in the future. With the further development of automotive intelligence, the company's automotive high-speed high-frequency connector business has ushered in rapid growth. The product competition pattern is good. It has been gaining momentum in many leading automobile customers one after another, and its market share is expected to increase further. The company is expected to remain the leader in domestic production for a long time and cover for the first time, giving the company a “buy” rating.

[Main logic]

Automotive electronics: Products are being sold to many automotive customers, the business is growing rapidly, and the market share is expected to continue to increase. Automotive high-frequency high-speed connectors not only need to ensure mechanical reliability in the vehicle environment, but also consider the integrity of high-frequency transmission signals and electromagnetic interference. Technology and industry entry barriers are high. The domestic automotive high-speed connector market is dominated by overseas giants. According to the Huajing Industry Research Institute, Rosenberg, Tyco, and Amphenol together occupied about 92% of China's automotive high-speed connector market in 2021. Electric Connect Technology is a leading domestic company, with a market share of 7%. We have calculated the size of the automotive connector market in China. It is estimated that in 2024, China's automotive high-frequency high-speed connector market will be 11.8 billion yuan. Benefiting from the deepening degree of automotive intelligence, the related market size will continue to expand.

Electric Connect Technology is the leading domestic high-frequency and high-speed automotive product layout company. The customer base covers leading domestic automobile manufacturers and leading overseas Tier 1 companies. Currently, the company's automotive connector products have entered the supply chains of Chery, BYD, Geely, Great Wall, Changan, Ideal and other enterprises and have achieved batch supply. In 2023, the company's automotive electronics business revenue was 0.823 billion, an increase of 60% over the previous year. The company's domestic penetration rate in this field is expected to increase further in the future, and with the continuous introduction and mass production of overseas Tier 1 customer projects, the company's automotive electronics business is expected to continue to experience rapid growth.

Consumer electronics: RF connectors are in a leading position in China, and BTB connectors have ushered in rapid growth. The company is a domestic supplier of advanced micro RF electrical connectors and interconnection systems related products. It is in a leading position in China's RF connector industry. Customers include mainstream smartphone brands at home and abroad. BTB connectors are mainly used for PCB/FPCB connections, and can be applied to various functional modules in mobile phones. The business has gradually matured after years of cultivation, and is expected to maintain rapid growth in the future.

Risk warning: smartphone market demand falls short of expectations; automotive electronics business growth falls short of expectations; risk of losing technical talent