Domestic medium-temperature solder leading enterprises, revenue to achieve steady growth. The company is the single champion in the domestic medium-temperature solder industry, accounting for more than 14% of the domestic hard solder market in the past 18 years, and has successively developed copper-based solder, silver solder, vacuum solder, composite solder, electronic silver paste, tin solder paste and other products. Downstream application fields from refrigeration HVAC, power and electrical equipment gradually expanded to new energy vehicles, electronic connections and other new tracks. The company has a stable ownership structure and steady revenue growth, with a compound growth rate of 16.72% in 19-22. In the first half of 23, the company achieved revenue of 703 million yuan, an increase of 13.08% over the same period last year.
Customers' high-quality superimposed production capacity is released, and the business of refrigeration, HVAC and electric and electric solders continues to be consolidated. In the direction of refrigeration and HVAC, Gree, Midea, Haier, Sanhua Intelligent Control, Danfoss and other high-quality household appliances and parts enterprises are all the company's customer groups; power and electrical direction, the company cooperates with Harbin Electric Power Group, East Power Group, CRRC Corporation, Baoguang shares and other domestic well-known motor, rail transit equipment and vacuum switch production enterprises. The company's current production capacity is 6000 tons / year, and the annual capacity utilization rate is nearly 100%. It is expected that the company's new production capacity of 4000 tons and the original production line transformation project will be completed in December 23, and the total capacity will reach 10000 tons / year after the completion of capacity climbing. It is expected to help the company break through capacity constraints and further expand the scale of production and operation.
New energy vehicles and electronic connection business continue to explore, open the company's second growth line.
(1) New Energy vehicle Business: the company has passed the verification of Hongfa, the leader of high voltage DC relay, and Meicheng Ceramic, a supplier of ceramic sealing rings for BYD blade battery. successfully cut into the new energy vehicle track, 22 years of the company's new energy vehicle business revenue of more than 45 million yuan, an increase of more than 5 times over the same period last year. Under the trend of high-voltage fast charging of new energy vehicles and the continuous expansion of blade battery applications, the solder business of new energy vehicles is expected to achieve high growth.
(2) Electronic connection business: actively arranging microelectronic connection solder solder paste and conductive silver paste business. In terms of solder paste, the company has passed the verification of Shenglu Communications, Shuoge Electronics, Yubang New Materials, Oriental Sunrise and other customers, and has customer certification barriers. Under the trend of domestic alternative industry, the market share is expected to continue to expand. Silver paste, the company's silver paste products have been used in electronic components and flexible circuits and other scenes, in addition, the company actively layout photovoltaic low-temperature silver paste, broad space for growth.
Investment suggestion: we believe that in the traditional business area, the company is expected to deepen cooperation with high-quality customers by virtue of technical advantages, and increase profits by virtue of large-scale advantages and management optimization. In addition, the company has successfully obtained downstream core customer certification and realized large-scale revenue in the field of new energy vehicles and electronic connection materials, and we believe that the development of the new track is expected to contribute more high gross margin products to the company. further open up the company's growth space. It is estimated that the overall operating income from 2023 to 2025 is 15.67,20.61 and 2.601 billion yuan respectively, with year-on-year growth rates of 28.4%, 31.5% and 26.2% respectively, and the return net profit is 0.62,0.97 and 144 million yuan respectively, with year-on-year growth rates of 608.2%, 56.4% and 49.6% respectively, corresponding to PE of 31, 20 and 13 times. Considering the steady growth of the company's medium-temperature solder business and the rapid growth of new energy vehicle and electronic connection business, it was given a "recommended" rating for the first time.
Risk tips: the risk of a sharp fall in raw material prices; the risk that the demand of the electronics and new energy vehicle industry is lower than expected; the risk that the progress of new product development is not as expected; the risk that the cash flow of business activities is negative; exchange rate risk.