Deeply involved in FPC for more than 20 years, volume and price are rising, and the company has been deeply involved in the FPC industry for more than 20 years since its establishment in 2003. Its products are mainly used in the fields of consumer electronics and automotive electronics, and have been recognized by leading customers such as Company H, Xiaomi, Honor, Google, Ningde Era, and China Innovation Airlines. According to statistics from China's Ministry of Industry and Information Technology, in 2022, the company's share of the international market for flexible circuit boards for smartphone display modules was 15.83%, ranking second, and the domestic market share was 49.78%, ranking first. As global smartphone shipments continue to rise, demand for FPCs has improved markedly, and the company's FPC utilization rate has also steadily increased; since 2023, the company has stopped participating in low price competition and is focusing on middle and high-end product orders.

Later, with the continuous optimization and adjustment of the order structure, and the increase in FPC business brought about by the rise of AI PCs, folding screen phones, wearable devices, robots, etc., the company is expected to usher in a sharp rise in volume and price.

Intelligent hardware and computing power overall solution provider, technology and resources two-wheel drive

In terms of computing power hardware, the company signed an investment agreement with the Tianshui government. At the end of 2023, the Tianshui Phase I AI computing power server factory with an annual output of 0.02 million units was completed and put into operation. The company formed a deep strategic partnership with Suiyuan Technology, a leading domestic computing power manufacturer, and acquired 100% of Nvidia's elite partner Allianz shares, forming a diverse heterogeneous hardware base including domestic computing power and Nvidia computing power. In terms of overall computing power solutions, in addition to providing procurement of computing power chips and manufacturing of complete servers, the company also has comprehensive capabilities such as large-scale networking, GPU operation status monitoring, computing power scheduling and operation management, and computing power consumption, and has transformed into an overall solution provider with two-wheel drive technology and resources. On the one hand, with the deepening and acceleration of the construction of intelligent computing centers, the company's computing power business continues to expand; on the other hand, the company is relying on its advantages in hardware resources, technical capabilities and financial strength, focusing on cooperating with leading customers such as operators, Internet vendors, and large model manufacturers, and the business scale is expected to increase rapidly.

Investment advice

The company's revenue for 2024-2026 is expected to be 6.25/9.813/12.439 billion yuan, net profit to mother is 0.087/0.377/0.559 billion yuan, EPS is 0.18/0.77/1.14 yuan, closing price on November 22, 2024 is 21.13 yuan, and PE is 118.27/27.39/18.46, giving the company an “increase in wealth” rating for the first time.

Risk warning

Downstream demand fell short of expectations, intelligent computing center construction progress fell short of expectations, etc.