2022-01-12 Bank of China International Securities Co., Ltd. Yang Shaohui and Tao Bo conducted research on Dongwei Technology and issued a research report "performance growth in 2021 is in line with expectations, waiting for the outbreak of demand for PET copper plating equipment". This report gives a buy rating to Dongwei Technology, and the current share price is 59.11 yuan.
Dongwei Technology (688700)
The company issued an annual performance forecast for 2021, which is expected to achieve a net profit of 150 million yuan to 170 million yuan attributed to the owner of the parent company in 2021, an increase of 70.82% to 93.60% over the same period last year. The net profit attributed to the owner of the parent company after deducting non-recurring profits and losses was 140 million yuan to 160 million yuan, an increase of 77.35% to 102.69% over the same period last year.
Support the main points of rating
Benefiting from demand growth in downstream applications, net profit growth is in line with expectations. The company's 2021 net profit is expected to grow by 70.82% to 93.60% compared with the same period last year, which is mainly due to the strong demand growth in the downstream application field, the company seizes the market opportunity, constantly strengthens the new product research and development and the market development, and the sales volume continues to grow. The contract debt at the end of the third quarter of 2021 was 198 million yuan, an increase of 38 million yuan over the end of 2020, indicating that the company had full orders on hand and provided performance guarantee for the whole year of 2021 and 2022.
The PCB industry continues to be booming, with outstanding advantages of vertical continuous electroplating equipment and high demand certainty. According to Prismark, the output value of PCB will reach US $86.33 billion in 2025, with a compound annual growth rate of 5.8 per cent, benefiting from the increase in 5G penetration and the expansion of smart device applications. Vertical continuous electroplating equipment has gradually become the mainstream technology development direction of the industry with the advantages of high safety, good performance, energy saving and environmental protection, simple maintenance, high performance-to-price ratio and so on. According to the data of printed Circuit Information and CPCA, it is estimated that the market scale of vertical continuous electroplating equipment in China will reach 4.105 billion yuan by 2025. The company is the leader of vertical continuous electroplating equipment, with a market share of about 30%, and will fully benefit from the growth of demand for vertical continuous electroplating equipment in the future.
On the eve of the outbreak of PET composite copper foil demand, Dongwei PET copper plating equipment has obvious advantages. Ningde Times, a leading manufacturer of power batteries, released a new multi-functional composite current collector technology at the 2021 World New Energy Automobile Congress. compared with the traditional current collector, PET composite aluminum foil and copper foil have the advantages of high safety, high specific capacity, long life and strong compatibility, and can completely solve the industry problem that the battery is easy to get out of control due to internal short circuit, and effectively improve the battery capacity. it has a broad application prospect in the future. At present, Dongwei Technology Coil horizontal Copper plating Line and bilateral fixture Conductive Ultra-thin Coil horizontal coating Line have met the mass production requirements and technical conditions, and have obvious first-mover advantages. In the future, with the gradual improvement of the permeability of PET composite copper foil in power and energy storage batteries, according to our estimates, PET copper plating equipment will have a market space of 40-5 billion yuan in 2025.
Valuation
The revenue forecast of the company from 2021 to 2023 is 819,338,640 million yuan, and the net profit is 166,245,379 million yuan. In the context of the continued boom in the PCB industry and the outbreak of PET copper plating demand, the company, as the leader in vertical continuous electroplating equipment, will fully benefit from maintaining its buy rating.
Major risks to rating
The prosperity of the PCB industry is not as good as expected; the promotion of PET composite copper foil is not as expected; the competition in the industry is intensified.
In the last 90 days, the stock has a total of 1 agency rating and 1 buy rating; according to the Securities Star valuation analysis tool, Dongwei Technology (688700) good company has a rating of 3 stars, a good price rating of 0.5 stars and a comprehensive valuation rating of 2 stars. (rating range: 1-5 stars, up to 5 stars)