Core point of view
High performance growth in the first quarter, profitability to maintain a high level: the company's 21Q1 revenue of 280 million yuan, year-on-year increase of 63%, return to the mother net profit of 30.11 million yuan, year-on-year increase of 50%, revenue scale and performance coordinated high growth: 1) sufficient orders from major customers at home and abroad, thermal conductive graphite materials and die-cutting share further increased 2) through the continuous optimization of production process and supply chain, the company maintains a high level of profitability and steadily improves the company's net profit. The company's heat conduction graphite technology remains in the lead in the world, and new products such as heat pipe / VC soaking plate, thick graphite, flexible graphite and other new products are promoted as planned, while deeply cooperating with communication customers'5G base station construction, we continue to be optimistic about the company's sustainable growth prospects in the 5G era!
The thermal conductive graphite film process remains in the lead in the world, and the emerging thermal conductive technology is promoted as planned: the increase in the thickness of thermal conductive graphite materials in 5G smart phones and the wide adoption of composite and multi-layer high thermal conductive films will significantly increase the value of thermal conductive graphite on a single machine. the market size is expected to double (up to 15 billion yuan). The company leads the world in thermal conductive graphite processing technology, the share of key customers continues to increase, Android customers continue to achieve full coverage of the world's leading mobile phone customers, while leading the layout of integrated heat dissipation solutions, copper tube / VC soaking plate is expected to quickly introduce into major customers, further thickening the value of a single machine, but also improve the layout of 5G product lines, and is expected to quickly seize the new incremental market in the future.
The electromagnetic shielding and thermal conductivity materials of 5G base stations have a broad prospect: the construction of 5G base stations has led to a significant increase in the demand for electromagnetic shielding and thermal conductivity, and the market size will reach nearly 10 billion US dollars. The company maintains long-term cooperation with major communications equipment manufacturers, and continues to develop new technologies for electromagnetic shielding and thermal conductive materials of 5G base stations. With the landing of additional investment projects, efficient heat dissipation modules continue to make substantial breakthroughs. At the same time, the stable supply of major domestic communications customers is expected to continue to benefit from the domestic substitution trend, laying the foundation for the batch supply of domestic 5G base stations and supporting equipment. With the acceleration of 5G construction cycle, the company's communications-related products are expected to usher in a period of rapid development again.
Financial Forecast and Investment suggestion
We forecast that the company's EPS for 21-23 years will be 0.91,1.16 and 1.38 yuan respectively (the original forecast for 21-22 years will be 1.17,1.35 yuan respectively, slightly adjusted based on the construction progress of 5G base stations and the current equity). According to the comparable company, the target price of 26 times PE, for 21 years will be 23.66 yuan, and the buy rating will be maintained.
Risk hint
Smartphone sales fell short of expectations; the risk of product price fluctuations; 5G construction schedule fell short of expectations.
