GF Securities Zhou Jin
Steady growth of performance Farad electron It is the largest film capacitor manufacturing company in China, with six subordinate production plants, with an annual output of 2.5 billion film capacitors and 1600 tons of metallized films. It is widely used in communications, home appliances, green lighting, computers, automotive electronics, industrial control and other fields.
In 2006, the company's main business income was 491 million yuan, up 22.9% year on year; The main business profit and net profit were 185 million yuan and 107 million yuan respectively, with year-on-year growth of 25.6% and 26.3%.
It is worth noting that, in the competitive environment of falling product prices and rising raw material prices, the company has steadily maintained a net sales interest rate of about 20% for seven years through continuous optimization of product structure and fine management and operation, and the main business costs and period expenses in 2006 were lower than the growth rate of main business income.
Outstanding operation capability Due to the fact that the financial data of most peer companies in 2006 have not yet been released, the financial data of Fara Electronics over the years are stable. For example, compared with the domestic and international capacitor manufacturers (they are integrated passive component manufacturers) in 2005, the important financial indicators of Fara Electronics are outstanding. At the same time, the main revenue and net profit of Farad Electronics showed a good growth trend from 2002 to 2005. The growth of net profit exceeded the growth of revenue, and the performance was better than Fenghua High tech and Copperpeak electron 。
Good growth prospects By the end of 2007, the completion of the factory construction project will expand the company's capacity by more than 50%. Therefore, changes in future revenue and profits mainly depend on the product market demand.
In 2006, it is expected that the business areas of the company will be 30% for household appliances, 35% for lighting, 25% for communications and 10% for others. Among them, the sales growth prospects in the lighting and automotive fields are better.
1. The lighting industry is expected to grow by 30% annually. The lighting capacitor business is facing the business opportunity brought by the national "green lighting plan". The plan is a systematic project for lighting power saving and reducing environmental pollution, which helps to alleviate the contradiction between power supply and demand. At present, China's lighting power consumption is 150 billion kilowatt hours (10% of the total power generation). By implementing the "China Green Lighting Project", 30 billion kilowatt hours of electricity can be saved, 150 billion tons of raw coal can be saved, pollution can be reduced and the environment can be protected.
The implementation of the "green lighting" plan includes the promotion and use of efficient and energy-saving electric light sources and energy-saving lighting electrical accessories (such as electronic ballasts, dimming devices, etc.). According to the survey data of China Lighting Association, the total market volume of energy-saving lamps in China is growing at a rate of 30% every year. Among them, the film capacitor is used for the electronic starter of energy-saving lamps and other functional devices.
At present, Farad Electronics has entered the formal stage of selling capacitors for energy-saving lamps to Philips, Osram and General Electric, and the rapidly growing domestic energy-saving lamp market will provide more growth space for the company's lighting business. In view of the strong product R&D capability and cost control capability of Farad Electronics and its leading position in domestic film capacitors, we assume that the sales of this part of the market of Farad Electronics will keep pace with the sales of the domestic energy-saving lamp market, with an annual growth of 30%.
2. The business in the communication field is expected to surpass the upcoming launch of China's 3G market in previous years, which is expected to significantly boost the demand for communication capacitors in the next few years, making the growth rate of this part of business revenue exceed that of previous years.
3. The automotive business will be the potential growth highlight of profits. The rising oil price and environmental protection trend have accelerated the development of hybrid electric vehicles (HV vehicles). HV vehicles adopt a driving form of "internal combustion engine+motor". Motor and internal combustion engine can respectively provide power under the most efficient working conditions. At present, the global car ownership has exceeded 800 million New car More than 60 million vehicles. If 10% of the vehicles produced in the world are converted to hybrid systems, the annual sales volume of HV vehicles will reach 6 million.
The feature of HV vehicle is that it can use the rechargeable battery to accumulate power to drive the motor. This process requires the inverter circuit which uses a large number of capacitors. The rated voltage of the capacitor in the circuit is required to reach 750V. Because the film capacitor has self-healing property and can withstand high voltage, and the equivalent series resistance of the film capacitor is almost not affected by temperature, while the equivalent series resistance of the general aluminum electrolytic capacitor at a low temperature of - 40 ℃ is several times as much as 20 ℃, resulting in a sharp increase in power loss, so the film capacitor gradually replaces the aluminum electrolytic capacitor as the HV vehicle power system capacitor.
In June 2006, Farad Electronics obtained the ISO/TS16949 automobile electronic quality system certification issued by BSI. Although further business contact with customers and long-term manufacturer inspection are still required from obtaining the certification to entering into actual sales, the success of the certification marks the affirmation of Farad Electronics' research and development capacity and production capacity in high-end field, This also laid the foundation for the development of the capacitor business in the automotive market.
We expect that the trend of energy conservation and environmental protection will lead to hybrid Automobile market Rapid growth, while the film capacitor of automobile power system has fewer competitors and higher unit price. Therefore, once it enters into real sales, the profit margin of this part of the business is expected to be higher than the level of existing products.
4. The business structure adjustment in the household appliance field has little impact on Farad Electronics' sales of household appliance capacitors. The reason for the slow growth is that the traditional CRT TV market is shrinking, thus reducing the demand for corresponding capacitors. However, the rise of other new display products, such as LCD TV and PDP TV, is conducive to increasing the demand for capacitors for household appliances.
The performance forecast assumes that the company's household appliance capacitor revenue will remain stable in the future; The input of capacitance for lighting increased by 30% annually; Communication capacitance input increased by 25% annually; The revenue of other capacitors increased by 30% annually; The gross profit rate and the two rates have basically remained stable in recent years, so the prediction parameters adopt the average level in recent three years.
It is estimated that the profit of the company will grow by 23.1% annually from 2006 to 2008. If the P/E ratio takes the sustainable growth rate, then the P/E ratio can be 22 times in 2007 and 2008, then the stock price will be 13.0 yuan and 15.7 yuan respectively, and the current stock price will be 15.0 yuan, giving a "hold" rating.
Sina statement: The content of this article is purely the author's personal view, only for investors' reference, and does not constitute investment advice. Investors operate accordingly at their own risk.
