Event: Jingyan Technology issued an incentive plan, including 892800 stock options with an exercise price of 54.25 yuan and 1.0289 million restricted shares with a grant price of 27.13 yuan.
Unlocking the target shows the confidence of the company. The three-year unlocking conditions of the company are that the revenue in 2021 is not less than 2.3 billion yuan or the net profit is not less than 230 million yuan, the revenue in 2022 is not less than 2.99 billion yuan or the net profit is not less than 299 million yuan, and the revenue in 2023 is not less than 3.887 billion yuan or the net profit is not less than 389 million yuan. We think that the unlocking target shows the company's operational confidence in the next three years!
The company's revenue and performance this year are both lower than expected at the beginning of the year, and we judge that this is due to the delay in the supply of key materials and folding screen projects for downstream customers. During this period, the company continued to follow up and invest in research and development, resulting in a significant decline in profitability. In addition, the pace of recruitment was greatly affected by the epidemic, resulting in a decline in operating efficiency in the first three quarters.
We follow up, the company's major customers multi-photo bracket, various brands of smartwatch case business is progressing smoothly, 2021 is expected to usher in full capacity!
The MIM process accelerates its entry into the wearable field, and the business boundary expands greatly. Based on the unit prices of some of the products currently used in wearable parts, we expect wearables to significantly increase the market space for MIM processing. As a leading manufacturer of MIM technology, the company is expected to benefit deeply from the upgrade dividend of wearable equipment.
In line with the needs of the 5G era, we will set up two related departments of transmission and heat dissipation to create precision manufacturing platform enterprises. Since 2018, the company began to lay out the transmission structure and heat dissipation business one after another, and two related departments were formally established in 2019, and the 0.3/0.25um copper / stainless steel heat dissipation scheme made a smooth breakthrough. We expect that as these two new businesses are laid out one after another, Jingyan technology as a precision manufacturing platform enterprise will soon take shape.
In addition, the company completed the convertible bond issue in the early stage, and the conversion price is 64.28 yuan. at present, the stock price is lower than the convertible bond conversion price and the exercise price of stock options, and the margin of safety is quite large.
Profit forecast and investment advice: we believe that Jingyan Technology, as a leading manufacturer in the field of MIM technology, is expected to benefit deeply from the rise in the volume and price of wearable equipment MIM parts, and the company has continued to increase production capacity expansion and R & D investment in the past two years, laying a solid foundation for high growth in the next two years. In addition, the company closely follows the industry trend, taking the lead in the layout of precision transmission structure and 5G terminal heat dissipation module, which is expected to become the follow-up growth driver. From 2020 to 2022, the company is expected to achieve revenue growth of 5%, 57.3%, 51%, corresponding to 15.47 million yuan of revenue in 2020-2022. It is estimated that the growth rate of the company's homing net profit from 2020 to 2022 is-22.4%, 93.5% and 57.3%, respectively, corresponding to 133,000,000 yuan in 2020-2022. Maintain a "buy" rating.
Risk hint: the downstream demand of the industry is not up to expectation, and the progress of process promotion is not up to expectation.