Key points of investment
Next Wednesday (January 10), a company listed on the main board of the Shanghai Stock Exchange “Shengjingwei” will ask for a quote.
Shengjingwei (603375.SH): The company's main products include electronic control modules, detonation controllers, amplifiers, etc. Among them, electronic control modules and detonation controllers are used in the blasting field, and amplifiers are mainly used in industrial control, new energy, automobiles, communications and consumer electronics. The company achieved revenue of 211 million yuan/356 million yuan/771 million yuan respectively in 2020-2022; YOY was 180.70%/68.66%/116.79%, and the three-year compound annual growth rate of operating income was 117.32%; realized net profit to mother 63 million yuan/88 million yuan/185 million yuan, YOY was 298.69%/38.83%/111.56%, and the compound annual growth rate of net profit for the three years was 127.08%. In the latest reporting period, 2023Q1-3 achieved operating income of 541 million yuan, an increase of 13.61% over the previous year, and net profit of 120 million yuan to mother, an increase of 8.23% over the previous year. According to the company's preliminary forecast, the company's net profit for 2023 is expected to be 209-218 million yuan, an increase of 12.90%-17.76% over the previous year.
Investment highlights: 1. The company is a leader in electronic control modules in the domestic blasting field. During the reporting period, China's electronic detonators quickly replaced traditional detonators, and the company seized the opportunity to achieve better development. Electronic detonators use electronic control modules for detonation control. Compared with traditional industrial detonators that use chemical delay agents to achieve this function, the electronic detonator market has experienced explosive growth since 2018, with national policy support, the electronic detonator market has experienced explosive growth, from 0.16 million in that year to 344 million in 2022. The CAGR reached 115.33%, and the penetration rate of electronic detonators increased year by year, from 1.28% in 2018 to 91.27% in 2023H1. Since its establishment in 2016, the company has been engaged in the development and industrialization of electronic control modules and detonation controllers. It has a first-mover advantage in related products. Under market opportunities, the company has actively increased its share and driven rapid growth in performance, and has now become a leading domestic leader in electronic control modules for the blasting field. 2. In addition to the field of civil explosions, electronic control modules can also be extended to fields such as geological exploration, oil extraction, and new energy vehicle safety systems. The company has made positive progress in these new fields. According to the company's prospectus, the electronic detonator detonator detonator system can be regarded as an IoT control system. In addition to the field of civil explosions, it can also be used in fields such as geological exploration, oil extraction, and NEV safety systems. The company has made breakthroughs in many new application fields. 1) In the field of exploration, in 2022, the company successfully developed an electronic control module for petroleum drilling and an electronic control module for petroleum exploration and carried out preliminary verification. Currently, the company has completed the seismic exploration electronic detonator detonation network safety technology improvement and supporting facility production project commissioned by a subsidiary of Sinopec. 2) In the field of new energy vehicle safety systems, the company is developing an “ignition power failure safety protection switch” containing an electronic control module in response to the requirements of relevant manufacturers. The traditional power failure protection method (high voltage relay+high voltage fuse) has a long response time, and the product can complete circuit breaking within one-thousandth of a second of receiving the signal, and the application prospects are relatively good.
Comparison of listed companies in the same industry: Based on the similarity of their main products, Lixin Micro, Youfang Technology, Lihewei, Neusoft Carrier, and Shengbang Co., Ltd., whose main products are signal chain simulation chips, and Srip are comparable listed companies of Shengjingwei. Looking at the comparable companies mentioned above, the average revenue (TTM) of the industry is 1,138 billion yuan, the comparable PE-TTM (excluding negative values, outliers, arithmetic average) is 49.31X, and the gross sales margin is 40.46%. In comparison, the company's revenue scale is lower than the industry average, but the gross sales margin is higher than the industry average.
Risk warning: Companies that have already begun the inquiry process may still not be able to go public due to special reasons; the company content is mainly based on prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate; there may be interpretation biases in the selection of content data. The specific risks of listed companies are shown in the text.