Core views

The company is the world's leading manufacturer of small-particle nano-nickel powder in China. It supplies high-end MLCC, and achieved net profit of 85.08 million yuan in the first three quarters, an increase of 562.41% over the previous year.

Product sales have rebounded sharply along with the recovery of the downstream consumer electronics industry. The rapid development of the AI industry has brought about an increase in demand for AI hardware for high-end MLCCs, driving the electronics industry and components into a new growth cycle. High-end nickel powder is an important upstream raw material in the MLCC industry. Under the trend of miniaturization, high frequency, and high power of passive electronic components, there are broad prospects for the usage of small-particle nickel powder used in high-end MLCCs.

occurrences

Net profit for the first half of the year was 54.58 million yuan, a year-on-year increase of 223.67%.

Boqian New Materials recently announced its 2024 three-quarter report. In the first three quarters, the company achieved a total operating income of 0.727 billion yuan, an increase of 47.96%; total profit of 0.091 billion yuan, an increase of 403.99%; net profit to mother was 0.085 billion yuan, an increase of 562.41% year on year; and realized net profit without deduction of 0.069 billion yuan, an increase of 981.47% year on year.

Brief review

Third-quarter results showed a high year-on-year increase, and there was a slight decline month-on-month.

The company achieved continuous year-on-year growth in revenue and net profit, thanks to the company's continuous R&D investment and market expansion in the field of high-end metal powder materials for electronics; Q3's product structure optimization, structural adjustment phase affecting gross profit levels, and the depreciation of the US dollar, etc., Q3's performance continued to increase year over year, but there was a slight decline from month to month. Q3 achieved a total revenue of 0.289 billion yuan, +38.56%/+21.05% year on month, sales Expenses remained stable, R&D and financial expenses increased, and income tax increased. Net profit attributable to mother was 30.5 million yuan in the third quarter, which significantly reversed losses year-on-year, -21.79% month-on-month, and 25.36 million yuan after deducting non-return net profit of 25.36 million yuan, reversing year-on-year losses, or -23.52% month-on-month. The gross profit margin for the third quarter was 19.75%, +2.89pct/-4.74pct YoY.

Consumer electronics are recovering, and demand for high-end MLCCs is driving an increase in demand for high-end nickel powder.

The company is the world's leading large-scale producer of high-end metal powder materials for nanoscale electronics. MLCC development has moved to high-end markets such as miniaturization, high capacity, and automotive. The particle size of 80nm nickel powder mass-produced by the company has reached the top global level. The new small-particle nickel powder used in high-end electronic slurries has entered the world-renowned MLCC supply chain, and its largest customer is Samsung Motor. Currently, the consumer electronics industry has bottomed out and demand is improving, and fruit chain recovery is directly driving a recovery in demand for high-end MLCCs.

The world's leading manufacturer of small particle size nano nickel powder in China. High-end MLCC barriers In addition to the preparation process, nano-nickel powder is essential to MLCC. It requires many detailed indicators such as good sphericity, high vibration density, high conductivity, low electrical mobility, good corrosion resistance and heat resistance to solders, high sintering temperature, and good high-temperature co-firing with ceramic media materials. The company is the world's top 80nm nickel powder, and one of the very few companies for nickel powder within 200nm.

There are few companies in the world that can industrialize and mass-produce nickel powder for MLCCs; apart from the company, they are all Japanese companies. The company focuses on R&D and large-scale production of finished powders with small particle sizes below 180 nm. The particle size of 80nm nickel powder mass-produced by Boqian on a large scale has reached the world's top level. At the same time, the company is the sole drafting and formulation unit for China's first capacitor electrode nickel powder industry standard (standard number YS/T 1338-2019) (which has been implemented since 2020).

Demand for AI continues to explode, and a new growth cycle has begun.

MLCC is the rice of the electronics industry. The development of AI has put forward changes in the stability, power, and volume of electronic components, driving the consumer electronics industry into a new growth cycle. The passive electronic components industry is showing a trend towards miniaturization, high frequency, and high power, driving an increase in the amount of small-particle nickel powder used in high-end MLCCs. The rapid development of AI technology will lead to an increase in the use of high-end MLCC on AI servers, AI PCs, and AI mobile phones, especially high demand for small-particle nickel powder products.

Products such as silver-wrapped copper powder and nano silicon powder open up the future growth ceiling.

The development of the HJT industry faces the bottleneck of the high cost of silver paste. The company launched a variety of new HJT silver-coated copper powder products with good conductivity and low silver content, and continuously expanded the silver-coated metal powder series product line. Relying on technology and R&D advantages, the company collaborates with customers to develop new products for silicon-based materials. It prepares nanosilicon powder based on a unique plasma heating gas phase condensation method, which has advantages such as high purity and small particle size. Currently, the main engineering construction of the nano silicon powder pilot production line project has been basically completed, and the construction of an automated control system is currently being promoted, and start-up, commissioning and inspection work will be gradually arranged.

Profit forecasts and investment recommendations:

The company is a leading supplier of high-end metal powder materials for electronics. With the recovery of the consumer electronics industry chain, MLCC demand is picking up; with the rise of the AI wave, demand for high-end MLCCs in the fields of AI servers, AI phones, and AI PCs will rapidly increase. The company's 2024-2026 revenue is expected to be 1.04/1.37/1.98 billion yuan, and net profit to mother is 0.12/0.2/0.27 billion yuan, corresponding PE is 60/35/26 times, maintaining a “buy” rating.

Risk warning

1. The company's downstream is the consumer electronics industry. If the downstream recovery falls short of expectations, MLCC consumption falls short of expectations, it will affect the company's performance release; 2. The company's customers are relatively concentrated, and the proportion of the top five customers is high. If the production and operation of major downstream customers fluctuate, it will affect the company's product shipments in the short term; 3. The company's raw materials are metals such as nickel, copper, silver, etc., and metal prices are related to global economic implementation, Federal Reserve policies, geographical factors, etc., if metal prices fluctuate drastically, or affect the company's raw material costs and gross margin levels; 4, 4. The company's silver-wrapped copper powder, nano silicon powder and other products It is being introduced. If the construction or release of production capacity falls short of expectations, it will affect the company's performance.