Deeply involved in intelligent manufacturing equipment for more than 20 years

Since its establishment in 2006, Bozhong Seiko has been deeply involved in the field of intelligent manufacturing equipment, mainly engaged in R&D, design, production, sales and technical services of products such as automated equipment, automated flexible production lines, key automated components, and tooling jigs. After 2017, based on the original 3C business, the company actively expanded and extended its business to industries such as semiconductors, automotive electronics, new energy, and low-altitude economy, building a diversified field layout and enhancing the company's competitiveness. In 2019-2023, the company's revenue achieved high growth from 2.11 billion to 4.84 billion, with a CAGR of 23.1%. In Q1-Q3 of 2024, revenue of 3.274 billion yuan was achieved, up 0.91% year-on-year, and overall growth was steady.

Serve world-renowned customers and deeply bind leading manufacturers

The company has established stable strategic partnerships with many world-renowned manufacturers of consumer electronics, new energy, automotive electronics and other products. Cooperative customers include Apple, Ningde Era, SAIC Motor Group, Honeycomb Energy, Juyuan, CNPC, Sinopec, Deepway, BAIC Blue Valley, Geely, BASF, Siemens, Xiamen Jinlong and other well-known domestic and foreign companies. Sales revenue to Apple industry chain companies accounts for a high proportion of the company's revenue, and is deeply bundled with Apple. The company has successively established foreign subsidiaries in Singapore, India, Vietnam, etc., to actively explore new customers and overseas markets.

Actively lay out the low-altitude economic sector, and the low-altitude policy continues to be favorable

In 2024, the low-altitude economy was first included in the work report of the Chinese government, rising to a new level of national strategy. Local governments successively introduced policies to support the development of the low-altitude economy. In 2023, Bozhong Precision entered the low-altitude economy. The business was carried out by the subsidiary Bozhong Robotics. It is mainly committed to providing a comprehensive low-altitude inspection solution with grid and large-scale deployment for smart city governance. Its main products are an open space integrated global cruise information sharing system, and cooperated with the local government to plan and build an open space integrated unmanned sensing system to create “one platform, one network” for drone services in urban management, emergency rescue, inspection, etc.

Investment advice and profit forecasting

Bozhong Precision is deeply involved in intelligent manufacturing equipment, highly tied to the supply chain of major customers, and actively expands the semiconductor, automotive electronics, new energy, low-altitude economy and other industries, benefiting from the AI upgrade trend of smartphones in the short term and other businesses in the company's layout in the long term. We expect the company's revenue and net profit to the mother in 2024-2026 to be 5.11/6.016/7.039 billion yuan and 0.42/0.53/0.64 billion yuan, respectively. The corresponding EPS is 0.94/1.19/1.43 yuan/share, according to the latest According to stock price estimates, the corresponding PE valuation was 30/24/20 times, respectively, and for the first time, coverage gave a “gain” rating.

Risk Alerts

The risk of macroeconomic and 3C industry fluctuations, the risk of escalating international trade frictions, the risk of high customer concentration, the risk of developing new business markets less than expected, and the risk of exchange rate fluctuations.