The company released its semi-annual report 2021 on July 30. According to the announcement, 2021H1, the company's revenue was 123 million yuan, down 16.12 percent from the same period last year, and its net profit was 37 million yuan, down 43.35 percent from the same period last year.
Comments:
Electromagnetic shielding film business is under pressure, and the growth of the cost side affects profits. 2021H1, the company's revenue was 123 million yuan, down 16.12% from the same period last year; of which, 2021Q2, the company's revenue was 64 million yuan, down 23.08% from the same period last year. We believe that the decline in company revenue mainly comes from two aspects. On the one hand, according to IDC data, the overall domestic market shipped 164 million units in the first half of 2021, an increase of 6.5% over the same period last year, of which the Chinese smartphone market shipped about 78.1 million units in the second quarter of 2021, down 11.0% from the same period last year. Downstream prosperity directly affects the demand for electromagnetic shielding film; on the other hand, the price of the company's products has been lowered in order to compete for market share. In terms of gross profit margin, 2021H1, the company's gross profit margin was 63.72%, a year-on-year decline of 1.12pct, basically stable. In addition, 2021H1's expense rate was 34.45%, a year-on-year increase in 13.66pct, mainly due to an increase in expenses incurred by the company for new product research and development.
The two new products are located in the high-end fine-line PCB market, and the high degree of customer overlap helps the company to expand its business. Benefiting from the "short and light" trend of electronic products, FPC line width and line distance will become more and more fine, increasing the demand for glue-free two-layer FCCL and ultra-thin FCCL. In addition, in the field of hard plates, the fine wiring of HDI, SLP and IC carrier plates is also an inevitable trend, thus driving the demand for belt carriers to peel off ultra-thin copper foil. Relying on technical commonality and customer homology, the company has laid out two new products of extremely thin flexible copper clad laminate and ultra-thin copper foil in recent years. With the advance of equipment entry, process debugging and customer certification, it is expected to open up the company's new growth space.
Profit forecast and valuation: we are optimistic about the company to expand the business layout of ultra-thin copper foil and ultra-thin flexible copper clad laminate, taking into account the lower-than-expected progress of the new production line, we reduce the profit forecast and target price, it is estimated that the company 2021 2022 EPS will be 1.41pm 1.87102.81 yuan respectively in 2023, the current stock price corresponds to PE of 63.36x47.8431.80 times, maintaining the "buy" rating.
Risk hints: the progress of production expansion is not as expected, the competition is intensified, and the customer certification is not as expected.