Chen Dingru, Zhongtai Securities Co., Ltd., recently conducted research on Hongda Electronics and released a research report "Hongda Electronics: Performance Growth Slows Down, Group Development Steadily Advances". This report gave Hongda Electronics an increase rating, and the current share price is 43.79 yuan.
Hongda Electronics (300726)
Investment Points
Event: The company released its third quarter report for 2022 on October 24. In the first three quarters of 2022, the company achieved operating income of 1.681 billion yuan, increased by 9.49% year-on-year, and achieved net profit attributable to shareholders of 662 million yuan, a year-on-year increase of 3.58%, and achieved net profit attributable to shareholders of 606 million yuan, a year-on-year increase of 5.86%. In the third quarter of 2022, the company achieved a single-quarter revenue of 578 million yuan, a year-on-year decrease of 5.62%, and a net profit attributable to shareholders of 212 million yuan, a year-on-year decrease of 11.60%, and a net profit attributable to shareholders of 189 million yuan with a year-on-year decrease of 12.04%.
revenue and profit growth rate slowed down compared with the same period. On the revenue side, in the first three quarters of 2022, the company achieved operating income of 1.681 billion yuan, a year-on-year increase of 9.49%, and in the third quarter of 2022, a year-on-year decrease of 578 million yuan, a year-on-year decrease of 5.62%; on the profit side, in the first three quarters of 2022, the company achieved net profit attributable to shareholders of 662 million yuan, a year-on-year increase of 3.58%, and in the third quarter of 2022, the net profit attributable to shareholders of 212 million yuan, a year-on-year decrease of 11.60%, and the growth rate of revenue and profit slowed down compared with the same period in 2021. In terms of profitability, in the first three quarters of 2022, the company achieved a gross profit margin of 67.37%, a decrease of 1.70pct from the same period last year; and achieved a net profit margin of 43.65%, a decrease of 1.69pct from the same period last year. It may be due to the increase in R&D projects and investment in the reporting period, resulting in a year-on-year increase of 65.30% to 124 million yuan. The cost control capability during
is optimized, and efforts are continued to increase R&D innovation. Internal management continues to be optimized. In the first three quarters of 2022, the company's three expenses accounted for 9.43%, a decrease of 4.43pct from the same period last year, of which sales expenses were 76.5061 million yuan, a decrease of 47.40% year-on-year, mainly due to the decrease in project bonuses during the reporting period; financial expenses were -3.7212 million yuan, a increase of 40.66% year-on-year, mainly due to the increase in bank interest income during the reporting period; administrative expenses were 85.7405 million yuan, a increase of 22.36% year-on-year. At the R&D level, the company's R&D expenses in the first three quarters of 2022 were 124 million yuan, an increase of 65.30% year-on-year, which will help accelerate product category expansion and technology iteration and enhance the company's overall competitiveness. The share of R&D/revenue increased by 2.49pct to 7.38% in the same period last year. The company's cost control capabilities continue to be optimized, and at the same time, it continues to increase its efforts in R&D and innovation, effectively improving the company's core competitiveness and laying a good foundation for long-term performance growth.
company is actively preparing stocks and production, and downstream demand is strong. As of the end of the reporting period, the company's advance payment amount was RMB 56.596 million, an increase of 81.72% from the beginning of the year, mainly due to the increase in raw material payments of suppliers in the reporting period; the amount of accounts payable was RMB 448 million, an increase of 39.64% from the beginning of the year, mainly due to the increase in sales during the reporting period and the simultaneous increase in funds payable by suppliers, indicating that the company's active preparation and stocking.
production capacity release is about to improve the production capacity of core products. The company's key projects under construction are progressing steadily. As of Q2 2022, the company's projects under construction "5G Electronic Components Production Base Project", "Electronic Components Production Base Expansion Project", and "Military and Civilian Electronic Innovation Industry Base Project" have increased to 22.90%, 58.36% and 66.32% respectively. In 2021, the company raised 1 billion yuan in private placement. According to the 2022 semi-annual report, the "Microwave Electronic Components Production Base Construction Project" is expected to be completed and completed by the end of December 2023. After the production is reached, it is expected to add ceramic capacitor production capacity by 2 billion/year, and circulator and isolator production capacity by 1.5 million/year, further consolidating the company's core product production capacity.
Military Tantalum capacitor market demand has accelerated, and there is a broad space for civilian domestic replacement. Against the backdrop of the high prosperity of military electronics in the 14th Five-Year Plan, the military tantalum capacitor industry will fully benefit from the increase in weapons and equipment and the construction of national defense equipment information. The company has been deeply engaged in military tantalum capacitors for more than 20 years, has advanced production technology and a relatively complete quality inspection system, and has a stable leading position in the industry. The performance growth rate of military tantalum capacitors is expected to continue to be higher than the industry average. Emerging industries such as 5G, new energy vehicles, , etc. have opened up broad growth space for upstream electronic components. Downstream companies have continued to strengthen their demand for localization of electronic components. The company has significant first-mover advantage and is expected to benefit from the domestic substitution of the civil tantalum capacitor market in the future.
non-tantalum business has developed strongly, and the group development strategy has achieved remarkable results. The company makes full use of its existing technology and channel advantages to continuously expand many products such as inductor , resistor , multi-layer porcelain dielectric capacitor, power module , etc., and is committed to the group development of military electronic components. At present, the non-tantalum business is developing rapidly and has achieved remarkable results. The group development strategy has become a new growth engine. With the smooth expansion of non-tantalum electric products, the company has broad room for long-term development.
Investment advice: Affected by multiple factors such as the repeated domestic epidemic and the limitation of inventory digestibility in the middle and downstream of the industrial chain, the company's component business development is lower than expected. We lowered the company's profit forecast, and we expect the company's revenue from 2022 to 2024 to be 2.246/2.528/2.765 billion yuan (the previous value was 2.084/2.773/3.509 billion yuan from 2021 to 2023), and the net profit attributable to shareholders was 883/982/1.057 billion yuan (the previous value was 880/1.179/1.501 billion yuan from 2021 to 2023), corresponding to PE of 21/19/18 times, respectively, downgraded to the "overweight" rating.
Risk warning: Military product orders are lower than expected; product delivery is lower than expected; profit forecasts are lower than expected.
Securities Star Data Center calculates based on the research report data released in the past three years, Guotai Junan Wang Cong's team has conducted in-depth research on the stock, with the average prediction accuracy in the past three years as high as 98.66%. It predicts that the attributable net profit in 2022 will be 1.035 billion yuan, and the predicted PE based on the current price conversion is 17.45.
latest profit forecast details are as follows:
A total of 11 institutions in this stock have given ratings in the past 90 days, buy ratings 8, and 3 increase ratings; the average target price of institutions in the past 90 days was 68.49. According to the financial report data in the past five years, Securities Star valuation analysis tool shows that Hundred Electronics (300726) has good competitiveness in the industry, good profitability, and average revenue growth. Financial health is relatively healthy, and financial indicators that need to be paid attention to include: accounts receivable/profit margin. The stock has a good company index of 4 stars, a good price index of 3 stars, and a comprehensive index of 3.5 stars. (Indicators are for reference only, indicator range: 0 ~ 5 stars, maximum 5 stars)
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