2022Q3 profit level improved year-on-year, capacity bottleneck gradually eliminated, to maintain the "buy" rating company released the third quarter 2022 report, the first three quarters of operating income of 2.68 billion yuan, YoY+0.33%, home net profit of 240 million yuan, YoY+29.2%, of which 2022Q3 single-quarter operating income of 880 million yuan, YoY-10.4%, home net profit of 75 million yuan, YoY+39.8%. Due to the loose demand in the downstream of PCB in the second half of 2022, we downgrade our profit forecast for 2022-2024. It is estimated that the net profit of home return will be 3.3pm 4.0max 5.1m, corresponding to EPS 0.390.48max 0.61 (previous value 0.46max 0.56max 0.61), and the current stock price corresponding to PE is 25.8pm 21.3max 16.7 times. Taking into account the company's technical clamping advantage in the field of PCB, the production bottleneck is expected to be gradually eliminated with the release of production capacity of Ji'an Shengyi and Dongcheng plant, and maintain the "buy" rating.
The loose demand for servers led to a slight drop in revenue compared with the previous month. The scale effect of Ji'an Phase I of the company showed that the company's 2022Q3 operating income decreased slightly by 6.6% compared with 2022Q2 in the first quarter. The company's product structure gradually moved from communication network products to server and automotive products, and the structure was more balanced. However, due to the influence of downstream server customers destocking and other factors, 2022Q3 server PCB orders were loose. Resulting in short-term fluctuations, the company's fixed assets turnover rate in the first three quarters of 1.05 times, compared with the first three quarters of 2021 decreased 1.17 times, the industry is still in a period of decline. From the perspective of profitability, the company's 2022Q3 single-quarter gross profit margin is 23.5% preceded by 6.2 pct, and the net profit rate is 8.6%. On the one hand, the price of copper clad laminate is stable and fell back to before this round of price increases, on the other hand, the company's Ji'an Shengyi Phase I reached the design capacity, which has more economies of scale, and the average cost per unit product has decreased.
The production capacity of Dongcheng Phase IV and Ji'an Phase II has been released one after another, helping to undertake high-quality projects and realize product structure switching Dongcheng Plant (Phase IV) with a total investment of about 2 billion yuan and a design capacity of 35,000 square meters per year. It is expected to be in trial production in the fourth quarter, positioning 5G communications, networks, servers, automotive electronics, some consumer electronics and other areas of high-density high-end PCB and soft and hard panels. Ji'an Phase II officially launched civil construction at the end of August, positioning middle and high-end automotive electronic products. After the launch of the new project, it is better than the original production efficiency, and alleviates the bottleneck of the company's lack of production capacity before listing, and is expected to undertake high-quality projects from customers.
Risk hints: capacity expansion is not as expected, server PCB demand is weak, upstream raw material prices change, RMB appreciation against the US dollar