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I. Main business Rating: 70
1, business analysis:
1, business analysis. The company's main business is mainly flexible circuit boards in the production process of testing equipment, including the first small batch trial production of semi-automated equipment (test fixtures), the later mass production of fully automated equipment, as well as related accessories and maintenance. At present, more than 80% of the company's customers are from Apple and Apple industry chain companies, the main demand on the one hand, from the transformation of the original equipment (based on the secondary use of some of the equipment), due to the non-standard FPC test equipment, customized features, a test equipment can only be used for a specific flexible circuit board testing, when the customer needs to test a new flexible circuit board must be newly purchased equipment to meet the new test requirements. However, each type of flexible circuit board has a certain production cycle, when the production cycle is over, the test equipment for this type of flexible circuit board will be idle. Customers for cost considerations, will choose to idle machine for transformation, to achieve the new flexible circuit board test equipment needs at a lower cost. On the other hand, from the customization of new equipment, the main demand for flexible circuit boards from consumer electronics, generally have new products launched when the relevant industry chain of equipment also need to be iterative, in addition to new energy automotive and communications equipment is also applied, so the company's performance growth is also closely related to the sales of consumer electronics, the speed of technological updates, the head of the company's new product launch.
2, the industry competition pattern: FPC industry competitors technology varies, high-end market threshold is higher. Some competitors started late, small scale, there are weak R & D capabilities, lack of core technology and homemade equipment, project implementation experience. In the core testing process of the world's leading manufacturers in the field of high-end applications, due to the complexity of the process, customization and intelligence requirements are higher, the entry threshold is higher. Several domestic counterparts specialize in their respective fields are not the same, such as precision measurement electronics, Huaxing Yuanchuang business focused on the LCD panel industry testing field, and then penetrate the semiconductor equipment. Changchuan technology is focused on the semiconductor field, Bojie shares and the company's business there is a certain degree of competition, but the focus of the product is not the same. To summarize, each peer will focus on a segment of the production process, but the industry competition will intensify after the mutual penetration, so there will be direct competition, the company's core strengths in the field of focusing on the testing of flexible boards.
3, the industry's development prospects: With the domestic consumer electronics continue to push the new, related product integration, the degree of intelligence is higher and higher, the demand for soft boards and penetration will gradually increase, but the speed will not be very fast, after all, the cost of soft boards to be higher. In addition, in new application markets such as new energy vehicles and communications equipment, once the volume is expected to bring a large increment to the industry, but the short term has not yet seen a large demand for a product.
4, the company's performance growth logic: (1) consumer electronics sales growth; (2) FPC penetration rate increase; (3) new energy and communication equipment on the demand for FPC.
The words in the box in the text are data supplements to the main text, which can be skimmed
Second, the corporate governance Score: 70
1, the majority of shareholders holding shares and equity pledges, executive incentives: The majority shareholder Couple are from technical background, combined shareholding of slightly more than 50%, employees and executives shareholding of about 3%, the average remuneration of executives is about 700,000-800,000 yuan, the overall incentives are appropriate.
2, the composition of the staff: mainly technical and production staff, test equipment for technology development, implementation of high demand for technology and sales staff rely on a relatively high degree of labor-intensive industries. The company's per capita revenue of 540,000 yuan, belonging to the medium level, per capita net profit of nearly 160,000 yuan, in the industry is a high level.
4. Shareholder Responsibility (Financing and Dividends): Listed for one year, the dividends for the year accounted for 70% of net profit, a good dividend rate.
3, financial analysis Score: 75
1, balance sheet (key subjects): The company's cash on hand of more than 1 billion, very abundant, accounts receivable and inventory accounted for a reasonable proportion of operating revenue; customized equipment for fixed assets is less investment. Customized equipment for fixed assets less investment, no interest-bearing liabilities, debt ratio of less than 5%, the overall asset structure is very healthy.
2, the income statement (key accounts): 2020 revenue and net profit growth against the trend, the first three quarters of 2021, revenue continued to maintain high growth, but the net profit of 2021, there are 0.39 billion yuan from non-recurring gains and losses, net profit after the exclusion of 0.41 billion yuan, a year-on-year decline of 24% (the first three quarters of 2020 net profit of 53.7 million yuan, down 24%). The first three quarters of 2020 net profit of 53.76 million yuan), the core is still because the company's expenses grow faster, especially the higher investment in research and development costs, the fundamental reason or because of the intensification of competition in the industry. 2021 first half of the company's orders on hand has more than 320 million yuan, 2022 revenue probability to continue to grow, but whether to maintain a high gross profit margin is dependent on the competitive environment.
3, key financial indicators analysis: The company's return on net assets in the past two years declined continuously, mainly due to the expansion of listed assets, the overall gross margin remained stable, but the expense rate increased significantly, relying on investment income to barely maintain a high net profit, the future of the competition is bound to intensify, whether the company can keep high net profit margins need to be continued. The company's ability to maintain a high net profit margin still needs to be continuously observed.
Fourth, growth and valuation analysis Score: 70
1, growth: Considering the demand for the FPC industry growth space, the penetration of steadily increasing, the company's competitiveness in the industry is more prominent, but the competition is increasing or damage the company's profitability. Increased or damage to the company's profitability, the overall steady growth.
2, valuation level: Based on the company's fixed equipment industry attributes as well as future growth expectations, giving the company 25-35 times the P/E ratio.
V. Investment Logic and Risk Alert
1, the investment logic: (1) FPC industry growth is stable, penetration rate continues to improve; (2) the company's leading technology, customer advantages; (3) performance Stable growth, low market value.
2, the core competitiveness: (1) innovative R & D strengths; (2) customer advantage; (3) product quality stability; (4) advanced and efficient technology development platform.
3, risk tips: (1) the risk of failure of major projects R & D; (2) Apple's dependence on the risk of revenue growth; (3) the risk of increased competition and decline in gross margins; (4) the risk of cross-border competition.
Six, the company's overall assessment (total score of 71.25)
Rating standards: AAA 85, AA: 77-84, A: 70-76; BBB: 60-69, BB: 55-59, B : 50-54; CCC and below 49