Main points of investment:
For the first time, it will be given a rating of "increasing holdings", with a target price of 29.02 yuan. The company's internal production line management upgrading and product expansion have achieved remarkable results, and the profitability has been greatly improved. at the same time, the company will further enhance its soft board processing capacity through the acquisition of Sumitomo Electric in Hong Kong. we believe that the company's profit inflection point has arrived and the future development path is clear. It is estimated that the company's EPS from 2021 to 2023 will be 1.16,1.68 and 2.46 yuan respectively, with year-on-year growth rates of 116.96%, 44.61% and 46.21% respectively. The company will be given a target price of 29.02 yuan, corresponding to 25 times PE in 2021.
The product layout is perfect, and the profit inflection point has appeared. After the acquisition of Mutailai, the hard board product line has gradually expanded from a large number of measuring plates to templates, small batch boards and medium batch boards, combined with its own mounting and assembly capabilities to meet the diversified needs of customers. At present, the Huizhou production base has turned a loss into a profit since the first quarter of 2021, and then with the gradual introduction of such batch board orders, the profit will be greatly increased. Superimposed by the capacity utilization and capacity expansion of Longnan intelligent factory, Junya's original business has stepped into the fast track of development, and its future income is expected to exceed 5 billion yuan.
It is proposed to acquire Sumitomo Electric in Hong Kong to keep pace with the world's first-class FPC suppliers. The company announced in December 2020 that it intends to acquire the FPC business of Sumitomo Electric in Hong Kong (with an income of 2.163 billion yuan in 2019). Sumitomo Electric is the top four soft board supplier in the world. This acquisition will help to further enhance Junya's manufacturing capacity in the FPC field. The company has been involved in the soft board field since 2016, and after three years of polishing, it has become a leading domestic FPC manufacturer, mainly in multi-layer soft boards, and its products are mainly used in mobile phone batteries, cameras, wireless headphones and other devices. In the future, with the processing capacity of Sumitomo and the introduction of domestic customers, the growth rate of its FPC business can be expected.
Risk hints: downstream demand fluctuation risk, raw material price fluctuation risk, business integration risk