The company's Toyama plant will release new production capacity soon, and HDI products will continue to be optimized, maintaining the "buy" rating company to release the 2020 annual report, achieving an operating income of 2.34 billion yuan (YoY+11.5%) and a net profit of 160 million yuan (YoY+9.2%). Among them, 2020Q4 realized operating income of 710 million yuan (YoY+16.4%) and net profit of 52 million yuan (YoY+26.3%). We maintain our profit forecast for 2021-2022 and increase our profit forecast for 2023. We expect the company's 2021-2023 net profit to be 2.30.2 billion yuan, EPS 0.58 billion, and the current share price corresponding to PE 29.4, 20.4, 14.5 times. Taking into account the imminent release of new production capacity at the company's Toyama plant, the HDI product structure continues to improve, maintaining the "Buy" rating. In view of the imminent release of new production capacity in the company's Toyama plant, the company continues to improve its product structure and maintain its "buy" rating.
Yuansheng Electronics FPC technical transformation led to profit improvement, 2020Q4 single-quarter revenue and gross profit margin hit a record high, single-quarter operating income and gross profit reached an all-time high, single-quarter operating income increased by 16.4% compared with the same period last year, single-quarter return net profit growth reached 26.3%, the company achieved operating income growth through technical transformation, no new plant restructuring pressure. The improvement of the profitability of HDI and FPC business drives the growth rate of home net profit to exceed the growth rate of operating income. In 2020, the company's FPC business realized the volume of display supporting products under the major customer strategy, and the company expanded its production capacity through technical transformation when the existing production capacity was limited. The gross profit margin of FPC increased from 30.3% in 2019 to 31.2% in 2020, and the gross profit margin of the related FPC components business increased to 16.6% from 14.4% in 2019.
With the production capacity of Zhuhai Fushan factory put into operation in 2021, the optimization of product structure is still the main theme of the company entering a new round of expansion cycle, and Zhuhai Fushan factory is expected to inject fresh blood. During the period from 2014 to 2017, the company has no new factories, and its capacity expansion is mainly completed through technological transformation. The original HDI business has increased some core equipment, and second-level HDI products account for 60% of the total. Toyama plant has entered part of the process trial production stage, mainly producing high-laminate, high-density interconnection board (HDI) products, there is still an improvement in the existing product structure, is expected to be put into mass production in May 2021, contributing to the increment of output value from 2021 to 2022. With the fierce competition between middle and low-end PCB, the company's expansion of high-level multi-tier PCB products is expected to get rid of the deterioration of competition, take the initiative to move forward to high-level HDI, high-level multi-layer PCB products, and achieve the overall optimization of product structure.
Risk tips: soft board and IC board customer introduction is not as expected, the company's Zhuhai plant production is not as expected, HDI demand is lower than expected, PCB industry competition intensifies
