Performance: in the first half of 2021, the company achieved operating income of 287 million yuan, an increase of 44.03% over the same period last year, and a net profit of 35.9564 million yuan, an increase of 53.33% over the same period last year, deducting 34.4521 million yuan of non-return net profit, an increase of 62.81% over the same period last year.
Without fear of the cost pressure caused by the rising price of upstream raw materials, the profitability is stable. In this report, investors should focus on the stability of the company's profitability. 2021H1, the company achieved a gross profit margin of 28.91%. For example, deducting 3.1172 million yuan from reclassification to operating costs, the gross profit margin was basically the same as that in the same period in 2010. in the first half of the year, the prices of copper foil, resin, fiberglass cloth and other raw materials continued to rise (including CCL prices rose by about 30% in the last six months). It is not easy to achieve this performance, and the reasons are as follows: (1) the template is mainly used in the R & D pilot stage, the customer acceptance of the price increase is relatively high, and the delivery cycle of the model is shorter, and the pricing strategy is more flexible. (2) the batch board business has entered the stage of rapid growth, the marginal benefit is prominent, the scale effect appears gradually, and the production cost is reduced. In the second half of the year, the rising trend of various raw material prices will slow down, and the company's overall profitability is expected to usher in a clear improvement.
Focus on security, downstream high-view demeanor to promote the continuous growth of the company. After the effective control of the domestic epidemic, the security market continued a good growth momentum. At the beginning of its establishment, the company began to accept orders in the field of security, and has formed a stable cooperative relationship with Dahua, Haikang and other domestic security leaders. The growth in income in the field of security in the first half of this year was particularly clear, increasing by 209.22% over the same period last year to 107.2359 million yuan. The proportion of total income has increased to 38.7% (security revenue accounted for 26.86% in 2020). According to the survey of the previous industrial chain, the high-profile state of security is expected to continue into the second half of the year, while in the long run, according to MarketsandMarkets forecast, the global security solution market is expected to grow from $257.9 billion in 2019 to $397.6 billion in 2024, an annual compound growth rate of 9%, and under the influence of this round of COVID-19 epidemic. The safety awareness of the government, enterprises and consumers is further enhanced, the growth of the security market is expected to exceed the forecast of MarketsandMarkets, and the continued high prosperity in the core downstream application areas will establish the company's growth potential in the future.
It is worth noting that the company is currently actively developing the automotive PCB market, and the revenue growth contributed by 2021H1 and automotive electronics is also quite clear, accounting for more than 10% of the total, and is expected to benefit from the rapid development of new energy vehicles to further grow in the future.
The growth of batch board is clear, and the advantage of one-stop service mode is gradually reflected. After years of deep ploughing in the model field, the company has accumulated a large number of customer resources and mature process technology, and the release of batch board production capacity makes the company have the ability to undertake customer batch order requirements, as far as customers are concerned, the process demands after product stereotyping can be matched in time, as far as the company is concerned, customer stickiness can be enhanced, and the order share of major customers can be increased. In 2020, through the introduction of the original model, the proportion of the revenue corresponding to the large order of the small batch board customers to the total mass plate revenue is as high as 70% of the total mass plate revenue. Combined with the analysis of the revenue growth of the template and batch board and the increase in the proportion of security revenue, the growth path of "undertaking the batch board order of existing model customers" has evolved at the customer level in the security field. On the whole, the advantages of one-stop service model are gradually reflected, the batch board production capacity released by the company in the future is expected to be fully and effectively digested, and the growth ceiling is gradually rising.
Profit forecast and investment rating: maintain buy rating. The company is one of the few domestic PCB enterprises with security as the core downstream field. At present, the high prosperity of the security industry is expected to become one of the core driving forces of the company's performance growth. In addition, the company's growth goal of cutting from the model to the batch board is constantly being realized. We estimate that the company's net profit from 2021 to 2023 will be 82 million yuan, 112 million yuan and 149 million yuan respectively. The current share price corresponds to PE of 32.64,23.97 and 18.02 times, respectively, maintaining the buy rating.
Risk tips: (1) downward prosperity of the security industry; (2) increased competition in the industry caused by domestic PCB capacity expansion; and (3) the company's capacity climbing progress is not as expected.
