Deeply ploughing the communication track, the performance has gradually grown. Since its establishment in 1985, it has focused on the research, development, production and sales of all kinds of printed circuit boards. In 2019, communication equipment boards, network equipment boards, computer / server boards, consumer electronics boards, industrial control medical boards and other boards each accounted for 47% of the total revenue, 27%, 27%, 2%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4%, 4% (the rest is other business). From 2017 to 2019, the revenue increased from 1.711 billion yuan to 3.096 billion yuan, and the net profit of CAGR+34.51%, increased from 138 million yuan to 441 million yuan. The company's accumulated high-quality customers include Huawei, ZTE, Samsung and other communications enterprises, as well as tide, IBM and other computer / server enterprises.
Communication / HPC drives demand growth, and the company is located in the first echelon of the industry. Downstream major markets: 1) Communication Electronics: according to Prismark,2022 's global PCB output value of US $21.1 billion for communications equipment, CAGR3.8%;2) computer: according to Prismark,2018-2023, the global IDC/ server growth rate was 6.0% and 5.8%, significantly faster than the industry average growth rate. Relying on its own advantages in research and development, production, product and service quality, technological innovation and rapid response, the company is in the first echelon in the industry. because the industry is relatively scattered, the company's market share in the areas of computer / server, network equipment and communication equipment in 2019 is 0.76%, 1.59% and 4.99%, respectively, but the company's share of high-end products for core customers is higher than the overall market share.
Card position mainstream customers and master the core technology, continue to maintain the leading edge. In terms of customers, the field of communications has covered Huawei, ZTE Corporation, Samsung Electronics, Nokia, Heath Semiconductor, FiberHome, etc.; the field of consumer electronics has covered OPPO, Vivo Communications, Huawei, etc.; the field of HPC has covered Chaochao, Huawei, IBM and so on.
In terms of technology, it has mastered 13 core technologies, such as large-size printed circuit manufacturing technology, three-dimensional structure PCB manufacturing technology, built-in capacitor technology, heat dissipation technology, etc., to maintain a strong core competitiveness. We believe that with the continuous improvement of capital and platform after listing, the company's competitive advantage will be further strengthened.
Profit forecast and valuation: considering the expected recovery of communication demand in 21 years, the release of the company's production capacity and the development of business diversification, it is estimated that the 20-22 year income will be 100 million yuan in 37-43-54, and the net profit will be 5.2 million yuan, 61pm, 780 million yuan and EPS0.79/0.73/0.93 yuan. The issue price is 12.42 yuan per share, corresponding to the 2019 return net profit PE is 23.42 times (the total equity after the issue), and the PE corresponding to the 2020 forecast net profit range is only 18.1-20.3 times. However, the average PE of three comparable companies, Shennan Electric, Shanghai Electric Power and Chongda Technology, is 29 times as much as 31 times in 2020E, and the median is 22 times as much as 25 times. Considering that the IPO pricing valuation of the company is lower than that of the industry and comparable companies, while the future growth will continue steadily, and the high-end attributes of technology, customers and products are better, we believe that the company is currently in a state of undervaluation and we suggest that we focus on it.
Risk tips: high customer concentration; intensified market competition; fluctuation of raw material prices; Sino-US trade friction.