Copper foil industry leader, CCL, PCB business leading. Chaohua Technology is mainly engaged in the R & D, production and sales of high-precision electronic copper foil, all kinds of copper clad laminate (CCL) and printed circuit board (PCB).
The company integrates industry chain, region, customer and R & D advantages, spans three major industries of copper foil, copper clad laminate and printed circuit board, conforms to the trend of new energy vehicles, 5G and IDC, and upgrades products to meet downstream high-end demand.
The demand for new energy batteries and 5G has increased, and 6 μ m copper foil has become a new growth point. In recent years, the policy has driven the steady growth of sales of new energy vehicles, and the demand for lithium copper foil is expected to grow at a compound growth rate of 31.8% in the next five years. At the same time, the construction of 5G base stations in China has been accelerated, and the market demand for copper foil for high-frequency and high-speed PCB has also increased rapidly. The production capacity of copper foil enterprises at the supply end follows the expansion, and ultra-thinning has become an industry trend. 6 μ m lithium copper foil is expected to have a gap between supply and demand in the future.
Copper foil business has become the main force, 8000 tons of high-precision project has been put into production. In 2019, the company's copper foil business income reached 493 million yuan, becoming the company's largest main business; in November 2020, the company added 8000 tons of copper foil production capacity, the current copper foil production capacity has reached 20000 tons. The company's product upgrading is accelerated, it already has the mass production capacity of 6 μ m lithium copper foil, and 5G related copper foil will also be quickly released.
The import substitution potential of high-end CCL is great. The CCL industry is in short supply and the head company has a high capacity utilization rate. IDC infrastructure promotes the construction of high-frequency and high-speed CCL. The company is accelerating the R & D and production of nano-paper-based high-frequency and high-speed copper clad laminate, there is a large room for import substitution in the future, and the gross profit margin of CCL business is climbing steadily year by year.
The demand for PCB high-end products is increasing. The demand for downstream products of PCB is upgrading, and the market potential of middle and high-end products is huge. The company's PCB business continues to develop towards high system integration and high performance, with a steady increase in gross profit margin.
The three-year litigation period has passed, and the company is expected to return to stable operation. On December 15, 2017, the company was punished by the CSRC for misrepresentation, and the litigation period expired on December 15, 2020. As of July 1, 2020, the above investor litigation cases had been basically completed, with a cumulative compensation amount of more than 9700 million yuan.
Profit forecast and investment rating: the company's revenue from 2020 to 2022 is expected to be 1.363 billion yuan, 1.737 billion yuan and 2.075 billion yuan respectively, with year-on-year growth rates of 3.2%, 27.4% and 19.4%, respectively. The growth rates of 4.9 billion yuan, 225 million yuan and 310 million yuan were 163.3%, 361.2% and 38.1% respectively over the same period last year, and the corresponding PE were 179.74, 38.98 and 28.22 times respectively. Considering the improvement of the industry-wide chain of copper foil and copper clad laminate, the price is gradually rising; the company's copper foil production has increased, and the litigation problems have been basically resolved, and non-operating expenses have been reduced; therefore, the coverage gives the company a "buy" rating for the first time.
Risk hints: the risk of raw material price fluctuations and supply, the risk of changes in the macroeconomic situation and the risk of changes in the international trade environment.