Brief comment on performance
On August 25, the company announced that the wholly-owned subsidiary had invested in the construction project of an intelligent factory with an annual output of 15 million square meters of high-performance copper clad laminate for high-end display technology, and determined that the investment amount was about 780 million yuan, and the source of funding was self-raised. The construction cycle of the project is 18 months, which continues to meet the needs of high-performance copper clad laminate customers in the high-end display field. Promote the company and customers to establish a sustained and stable strategic partnership and long-term stable development.
Business analysis
Jiangxi N6 plant started, plus the layout of high-end display to meet the growth opportunity. The production plan announced by the company is the production project of Jiangxi N6 factory, and the target products are mainly aimed at high-end display fields, such as CCL plate used by MiniLed, which has a greater improvement compared with ordinary plate in warping, heat resistance and other technical problems, and also has more added value than ordinary plate. According to the industry chain survey, the price of this kind of plate is 60% 100% higher than the normal price of ordinary products, and it is a key product in the process of product upgrading. The company's high-end display product series has been certified by the world's well-known panel manufacturers and PCB manufacturers, and the order will be greatly released after the production capacity of the N6 factory is released.
Actively expand production + the volume of high-end products, profit growth is guaranteed. We believe that the driving force for the future growth of the company comes from three aspects: 1) the compound growth of effective production capacity of 26% in three years. The company has opened a new plant in Jiangxi. According to the progress of the project, it is expected that the compound growth rate of effective capacity in 2021-2023 will reach 26%, and the release of capacity will lay the foundation for growth. 2) Jiangxi plant operation will rationalize and harvest profits. Starting from this year, Jiangxi factory production line began to run smoothly, of which N4 factory 3 production lines are now all full production, cost dilution has begun to show results, the future N5 and subsequent factory production will further dilute costs, profit bondage is expected to be eliminated; 3) high-end products through certification is expected to be volume. The company is one of the early manufacturers of high-speed copper clad laminates in China, and is currently the only mainland copper clad laminate manufacturer certified by Huawei for all kinds of high-speed products, and the company is still continuing to develop high-end new products. we believe that the volume of high-end products will provide a guarantee for the company's long-term growth.
Investment suggestion
In view of the company's profit from price increase, the dilution of production expansion expenses and the better-than-expected progress of key customers, we expect the net profit of 2021-2023 to be 440 million yuan, 600 million yuan and 740 million yuan, corresponding to 25X\ 18X\ 15X, and continue to give "buy" rating.
Risk hint
Demand fell short of expectations; falling prices led to lower-than-expected profits; and restricted shares were lifted.