Focus on overseas electronic parts ODM,Q2 performance ushered in acceleration. The company was founded in 2004, mainly engaged in 3C parts such as signal converters, wire harness, power adapters, electro-acoustic products and other four categories of ODM,2020H1 annual revenue accounted for 44%, 32%, 20%, 4% respectively. Different from Lixun Precision, the company mainly provides customized, multi-variety and small batch markets for overseas retail customers such as Amazon.Com Inc, Anke Innovation, Belkin and other overseas retail customers. In 2020, H1 benefited from the expansion of 3c accessories online channels, fast charging / intelligent charging retail volume, and increased gross profit margin. The company's H1 net profit reached 88 million yuan, up 47.73% from the same period last year, of which Q2 made a net profit of 65 million in a single quarter, an increase of 124% over the same period last year. Performance ushered in an inflection point and accelerated.
Fast charge into the inflection point, Haineng benefit from Apple Inc third-party brand outbreak. 5G mobile phones have serious rigid demand for battery and battery recharge. with the successive releases of Anke in 2018, oppo in 2019 and XIAOMI in 2020, as well as the promotion of charge pump technology and USB PD general agreement this year, fast charging has entered the turning point in the industry. the flagship model in the domestic Android market is the first to be popularized, and we expect the pre-installed permeability to be about 10%. While the foreign market represented by Apple Inc to reduce terminal costs is expected to take the lead in canceling the charger distribution program, Apple Inc retail market will usher in the outbreak, we estimate that about Apple Inc retail ODM market about 100 billion, after Haineng Industries obtains Apple Inc MFI qualification, we expect to benefit from the outbreak of demand for Anke Innovation, Apple Inc authorized third parties such as Belkin, and Amazon.Com Inc non-certified third parties. In addition, the company's current gross profit margin of the adapter is only 14%, and the profitability will be significantly improved after the follow-up scale (the company's previous net profit margin is 10-11%).
Wire harness and converter in the high-speed development, long-term build retail ODM platform. For Haineng Industry, we believe that the company is not only fast charging, the long-term model is based on customers and R & D, certification platform, to build a retail ODM platform leader, the company from converters, wire harness to 2018 cut into the power adapter, TWS and other categories are based on the diversified needs of downstream retail customers, the company has entered the core innovation supplier of Anke in 2019. Also based on the company's rapid delivery capability, flexible management, certification advantages, scale advantages, etc., looking forward to the next few years, the downstream category of chargers fast charging, wire harness type c USB 4.0, acoustic TWS and so on will enter the technical iterative release cycle. The company is optimistic about the medium-and high-speed growth brought about by the company's main business and category expansion.
Performance forecast and investment valuation: we predict that the company's revenue from 2020 to 2021 is 16.20 yuan and 2.278 billion yuan respectively, an increase of 47% and 41% respectively over the same period last year, and the realized performance is 2.2 yuan and 330 million yuan respectively, an increase of 85% and 50% respectively over the same period last year. The corresponding PE for 2020-2021 is 34 and 22 respectively. Considering the iterative cycle of the company benefiting from the downstream fast charging technology and the expansion of channels for medium and high-end customers such as Anke Innovation, Amazon.Com Inc and Belkin, we expect the company to maintain medium-to-high growth in the next few years, valuing it at 35-40PE in 2021, covering it for the first time with reference to the comparable company and its growth path, and giving it a "buy" rating.
Risk hint: Apple Inc cancels charger uncertainty; market size measurement deviation; category expansion is lower than expected
