1. FPC testing is a leading brand, and downstream applications are constantly expanding.
The company has long been committed to the research, design, production and sales of test equipment in the field of FPC. Through years of accumulation, it has become a supplier to many leading global FPC enterprises and a leading brand for FPC testing. At present, the company's products include automated testing equipment, testing fixtures and accessories, among which the automated testing equipment business is the company's main source of income and profit. From 2018 to 2020, the automated testing equipment realized income of 2.16 shock / 300 million yuan respectively, accounting for 88.75% of annual revenue, 82.58% and 85.51% respectively. As the company's products are highly customized non-standard products, except for the brief fluctuations in 2017, the company's gross profit margin remained high at 60%. In 2020, the company actively expanded the market for smart wear and 5G RF testing, with revenue of 350 million yuan, an increase of 29.36% over the same period last year.
2. Downstream demand growth of FPC & capacity migration inland to improve test demand FPC is in line with the trend of lighter and thinner electronic products and is widely used in the fields of consumer-automotive electronics and communications. Global smartphone shipments remain high, and the use of stand-alone FPC is on the rise, from 10 pieces of iphone4 to 24 pieces of iPhoneXs. With the rich features of smartphones, the demand for FPC in the field of consumer electronics is expected to further increase in the future. The increase in sales of new energy vehicles and the intelligent upgrading of traditional vehicles lead to an increase in the number of electronic components carried by new vehicles, which puts forward higher requirements for data transmission efficiency. FPC has higher data transmission efficiency and lighter weight than the previous tape harness. FPC has become the future trend instead of glue strip. China's FPC accounts for more than 40% of the world's output, bringing a lot of demand for FPC testing. The company has a full range of FPC testing products, which can meet the rapid delivery and automated testing needs of customers. With the increasing demand for FPC automated testing, the company's automated testing equipment revenue has grown rapidly in recent years.
3. Downstream demand diversification-the extension of testing field brings new growth point downstream demand diversification: FPC has the characteristics of light, thin and flexible, and has a high fit with wearable devices such as smart glasses and smartwatches, so it is the first choice for connecting devices. In recent years, global shipments of wearable devices have increased rapidly, with more than 400 million pieces in 2020 and 43.7% of CAGR in 5 years, which has led to an increase in the use of FPC.
The first growth point in the future: the test fixture still needs to be operated manually in the process of operation, and the demand for automatic and intelligent testing is high.
The second growth point in the future: the process characteristics of FPC make its surface easy to be damaged, and there is a demand for appearance testing. at present, the appearance test of FPCA is mainly completed by manual visual inspection, some defects are very similar to the background, and manual visual inspection is very difficult, which gives rise to the demand of intelligent visual inspection.
The third growth point in the future: the testing of consumer electronic products is generally divided into device-level, board-level, module-level and whole-machine-level testing; chip closed testing, as the upstream of FPC, has a lot in common with FPC testing in technology and customers, and the company's technology and business migration is convenient. The company will focus on the development of chip closed testing (especially sip chips) products, which already have a partial layout.
4, company core bright spot: FPC head enterprise core supplier, the technology accumulation is deep, the research and development strength is strong, the company technology accumulation is deep, can respond to the customer demand quickly. The company has become the core supplier of FPC head enterprises, with customers covering eight of the top ten FPC enterprises in the world, with a high degree of customer recognition. The company's R & D team has been ploughing the industry for many years, with rich R & D experience and multi-faceted technological innovation achievements; in recent years, the company's R & D personnel have grown rapidly, preparing for subsequent production capacity enhancement and upstream and downstream extension.
Profit forecast: the net profit of 2021, 2022 and 2023 is expected to be 1.28 RMB 1.56 / 187 million, corresponding to PE of 32-26-22, covering for the first time and giving a "highly recommended" rating.
Risk hint: the growth rate of the company's automated test equipment is not as expected; the progress of research and development is not as expected; and the progress of business development in new areas is not as
