The company's capacity release cashed in stacking and increased typesetting strategy to optimize costs, covering for the first time, giving "buy" rating companies are expected to take advantage of cost advantages to digest new capacity, enhance economies of scale through process optimization such as large-scale assembly, thus squeezing competitors with lower prices and thicker profits, and increase market share in the field of low-and middle-level PCB. We forecast that the operating income of the company in 2021-2023 will be 40.4 billion yuan, the net profit of return to the mother is 5.4 million, and the YoY+54.0%/38.0%/20.7%,EPS will be 3.39, 4.67, 5.64 yuan, respectively. The current stock price corresponds to the company's PE of 20.7, 15.0, 12.4 times in 2021-2023. Considering that the company's capacity will be cashed in 2021-2022, the superimposed PCB industry is in a high boom and is expected to fully digest capacity, giving a "buy" rating for the first time.
The company has entered the production capacity cash-in period, and the 2021Q1 performance has grown rapidly.
2021Q1 plank plan to enhance the original factory production capacity to accelerate the release of operating income and profits, 2021Q1 single-quarter operating income growth of 890 million yuan, YoY+82.1%, home net profit of 110 million yuan, YoY+330.7%.
The company's 2021Q1 entered the capacity cash period, and the company adopted a large typesetting scheme for the original A1-A3 factory and A5 factory, the typesetting size was upgraded from 24028 inches to 25043 inches, the output of the per unit production line increased, and the business income and profits were released at an accelerated rate. The company has entered a new round of expansion. In 2020, the company's capital expenditure reached 920 million yuan, a record high, with a year-on-year growth rate of 121.6%. It is expected that the new production capacity of A6 and A8 plants will be put into operation in 2021.
Large typesetting strategy to improve efficiency, low-end products highlight the cost advantage of companies in the new round of expansion cycle, the use of large typesetting scheme to achieve efficiency improvement, so as to achieve cost improvement. The core barrier of the company's large typesetting scheme is the self-made production process, and locked in the design of some equipment. Based on the cost calculation of the company in 2020, assuming that the total typesetting is increased from 24028 inches to 25043 inches, the corresponding output area of a single sheet is increased from 0.42sqm to 0.67sqm, and the fixed cost part is increased by 30-40% due to the increase in output. It is estimated that the total cost per unit area of PCB will be reduced from 496.7 yuan / sqm to 452.1 yuan / sqm, and the gross profit margin will increase from 22.9% to 29.9%, an increase of 7.0 pct.
Risk tips: the company's production capacity is not digested as expected, the intensification of industry competition leads to the decline of company product prices, the company's cost improvement is not as expected, and the demand of PCB industry is depressed.