The company released a periodic report for the third quarter, showing that the performance in the first three quarters exceeded expectations. In the first three quarters, the operating income was 462 million yuan, an increase of 37.33% over the same period last year. The net profit belonging to the owner of the parent company was 51 million yuan, an increase of 36.60% over the same period last year.
Benefit from the prosperity of 5G, wearable and other consumer electronics industries, and expand the application of military industry. There is a strong demand for consumer terminals and Internet of things products suitable for 5G signal transmission, and the demand for radio frequency coaxial cable for single equipment and the price of coaxial cable for terminal products are increasing together. this has led to the growth of the company's demand for low-loss, fine and ultra-fine RF coaxial cables and other main products. The company's customers are mainly medium and large electronic equipment manufacturers, and the terminal electronic products served by customers include Apple Inc, Samsung, Hewlett-Packard, Lenovo, TP-LINK and many other world-famous brands. The company has established long-term strategic cooperation with a number of military enterprises to jointly develop aerospace, electronics and other military RF coaxial cables. Through a non-public offering, the company has raised funds to build a high-speed and high-stability RF coaxial cable project with an annual production capacity of 400,000 km 5G communications and aerospace.
After reaching production, the internal rate of return of the project is 19.84% (after tax), and the payback period of project investment (after tax) is 5.69 years. The company has achieved good economic benefits by advancing its own funds to implement non-public projects.
Some achievements have been made in import substitution. In the past, the field of high-end RF coaxial cable was dominated by overseas companies. Through long-term accumulation and innovation in technology, production and management, the company has its own stable customer base in the field of high-end RF coaxial cable occupied by multinational enterprises, and has won the honor of excellent suppliers from many major international customers, such as WISTRON.
In the aerospace RF coaxial cable, the company also has a customer base.
Profit forecast: the company's business progress is better than expected and the profit forecast is raised. It is estimated that the operating income from 2020 to 2022 is 6.71,9.16 and 1.161 billion yuan respectively, the net profit is 0.73,1.05 and 136 million yuan respectively, and the EPS is 0.77,1.11,1.44 yuan respectively. PE was 47.83,33.31,25.59 times.
Upgrade to "buy" rating, with a target share price of 44 yuan.
Risk hint: systemic risk, fund-raising projects are not as expected.