[Matters]

The company disclosed its 2022 performance forecast and expects rapid growth in 2022. The company expects to achieve revenue of about 4 billion yuan in 2022, an increase of about 30% over the previous year, and net profit of 75 to 85 million yuan, an increase of 149.22% to 182.45% over the previous year. It is estimated that non-net profit of 7 to 9 million yuan will be deducted in 2022, an increase of 105.31%-106.82% over the previous year. The corresponding company achieved net profit of 73,875 to 83.875 million yuan in a single quarter for the fourth quarter of 2022, and deducted non-net profit of 447.6-46.76 million yuan in a single quarter.

[Comment]

Deeply cultivate products such as electromagnetic shielding, thermal management materials and devices, and build a leading enterprise in platform-based new materials and intelligent manufacturing in the ICT field. Through unremitting technology research and development, strict product quality control and excellent customer service, the company's business scope continues to develop into a platform-based manufacturer. It has gradually extended from electronic accessories products to R&D, production and sales of electromagnetic shielding materials, thermal dissipation materials, protective functional materials, base station antennas and related devices, and has become a leader in the fields of electromagnetic shielding and thermal conductivity applications.

The increase in the penetration rate of 5G puts forward higher requirements in terms of shielding and heat dissipation. Entering the 5G era, the number of intelligent connected devices and antennas has increased exponentially. As electromagnetic interference and device power consumption rise, the bottleneck of high-frequency, high-power electronic products is the electromagnetic radiation and heat energy they generate. Therefore, in the 5G era, the electronics and communications sector places higher demands on electromagnetic shielding, thermal conductivity and heat dissipation, driving demand for functional devices such as electromagnetic shielding and heat dissipation to increase.

The scale of the new energy business continues to grow, and a comprehensive range of product types covers leading customers in the industry. The scale of the company's new energy business grew in 2022. Products including liquid cooling plates, composite covers, connecting sheets, integrated die castings, and thermal conductive adhesives have been mass-produced and delivered to customers in the NEV sector such as Ningde Shidai, GAC, SAIC, and FAW. Products such as radiators, integrated die-castings, heat pipes, and conductive silicone have been delivered to new energy photovoltaic energy storage customers such as Huawei, Sunshine Power, Gurivat, and Goodway.

Strengthen internal management efficiency, actively introduce new processes and new technology research and development, and clarify the inflection point of profitability. As the company's designated new energy projects have gradually achieved mass production, the company continues to deepen cooperation with existing customers and actively develop new customer resources. At the same time, the company strengthened internal management efficiency, actively invested in research and development of new processes and technologies, strengthened the construction of automated product lines, reduced costs and increased efficiency. Overall profitability was greatly improved. The company's gross margin in the 2022Q4 quarter successfully achieved year-on-year and month-on-month growth.

[Investment advice]

The company has been deeply involved in the ICT field for many years, and has accumulated diverse supporting devices such as electromagnetic shielding materials and devices, thermal management materials and devices, base station antennas and related devices, protective function devices, lightweight materials and devices, etc., to provide customers in downstream electronics, communications and other fields with platform-based product solutions. The company's business expansion in new fields such as new energy vehicles, photovoltaics, and energy storage was smooth in 2022. The future will open up new growth space for the company. The company's revenue for 2022-2024 is estimated to be 41.41/5487/7371 billion yuan, net profit to be 0.80/2.83/4.34 billion yuan, and EPS is 0.16/0.56/0.86/yuan/share, corresponding to the current PE, 105/30/19/times, respectively, giving it a “increase in holdings” rating.

[Risk Reminder]

Downstream market demand fell short of expectations

New product promotion progress fell short of expectations

Production expansion has fallen short of expectations

Drastic fluctuations in exchange rates