It is the head of copper foil industry, leading in CCL and PCB business. Chaohua Technology is mainly engaged in the R&D, production and sales of high-precision electronic copper foil, various types of copper clad laminate (CCL) and printed circuit board (PCB).
The company integrates the advantages of industrial chain, regions, customers and R&D, spans three major industries of copper foil, copper clad laminate and printed circuit board, complies with the trend of new energy vehicles, 5G and IDC, upgrades products, and matches the downstream high-end demand.
The demand for new energy batteries and 5G increased, and 6 μ m copper foil became a new growth point. In recent years, policies have driven the steady growth of new energy vehicle sales, and the compound growth rate of demand for lithium battery copper foil is predicted to reach 31.8% in the next five years; At the same time, the construction of 5G base stations in China has accelerated, and the market demand for copper foil for high-frequency and high-speed PCB has also increased rapidly. The capacity of copper foil enterprises at the supply end follows the expansion, and ultra-thin copper foil has become the industry trend. The supply and demand gap of 6 μ m lithium copper foil is expected to appear in the future.
The copper foil business has become the main force, and the 8000 ton high-precision project has been put into production. In 2019, the company's copper foil business income reached 493 million yuan, becoming the company's largest main business; In November 2020, the company added 8000 tons of copper foil capacity. At present, the copper foil capacity has reached 20000 tons. The company's product upgrading is accelerated, and it has the mass production capacity of 6 μ m lithium copper foil, and the relevant copper foil for 5G will also be rapidly scaled up.
High end CCL has great import substitution potential. CCL industry is in short supply, and the capacity utilization rate of leading companies is high. IDC infrastructure promotes the construction of high-frequency and high-speed copper clad laminate. The company is accelerating the R&D and production of nano paper based high-frequency high-speed copper clad laminate, and there is a large space for import substitution in the future, and the gross profit margin of CCL business is steadily climbing year by year.
The demand for high-end PCB products continues to increase. The demand for PCB downstream products is upgraded, and the market potential of medium and high-end products is huge. The PCB business of the company has been developing towards high system integration and high performance, and the gross margin has been steadily improved.
The three-year litigation period has passed, and the company is expected to return to stable operation. On December 15, 2017, the company was punished by the CSRC for false statements, and the litigation period expired on December 15, 2020. As of July 1, 2020, the above investor lawsuits have been basically fulfilled, with a cumulative compensation amount of more than 97 million yuan.
Profit forecast and investment rating: the company is expected to achieve revenue of 1.363 billion yuan, 1.737 billion yuan and 2.075 billion yuan in 2020-2022, with year-on-year growth rates of 3.2%, 27.4% and 19.4% respectively; Net profits attributable to shareholders of the parent company are 0 4.9 billion yuan, 225 million yuan and 310 million yuan, with year-on-year growth rates of 163.3%, 361.2% and 38.1% respectively, and corresponding PE is 179.74, 38.98 and 28.22 times respectively. Considering the improvement of the whole industry chain of copper foil and copper clad laminate, the price will gradually rise; The copper foil production of the company is growing, and the litigation problems are basically solved, and the non operating expenses are reduced; Therefore, for the first time, the company is given a "buy" rating.
Risk warning: the risk of raw material price fluctuation and supply, the risk of macroeconomic situation change and the risk of international trade environment change.
