ECT(SZ:300679) Guolian Securities·2024-02-06 16:00Investment Rating - The report indicates a positive investment outlook for the company, highlighting its strong growth potential in the smartphone and automotive connector markets. Core Insights - The company has benefited from the rapid growth in smartphone sales, becoming a core supplier for major brands such as Xiaomi, OPPO, and Huawei, leading to significant revenue and profit growth [1][2]. - The automotive sector is emerging as a second growth space, driven by the increasing demand for high-speed connectors due to the acceleration of automotive intelligence [13][20]. - The company has established a strong research and development foundation, allowing it to produce high-standard products that meet international performance levels, particularly in RF connectors [8][52]. Summary by Sections Smartphone Market - The company's revenue grew from 469 million yuan in 2013 to 2.97 billion yuan in 2022, with a CAGR of 22.76% from 2013 to 2022 [2]. - The net profit attributable to the parent company increased from 155 million yuan in 2013 to 443 million yuan in 2022, with a CAGR of 12.38% during the same period [2]. Automotive Market - The automotive connector revenue reached approximately 0.93 billion yuan in 2020, with significant growth to 3.12 billion yuan in 2021 and 5.14 billion yuan in 2022, reflecting year-on-year increases of 236% and 65% respectively [56]. - The company has successfully entered the automotive high-speed connector market, with a complete product layout established since 2014, including products like Fakra and HSD connectors [52][56]. Research and Development - The company maintains a high R&D expense ratio, consistently above 8.5% since its listing, with a reported R&D expense of 236 million yuan in the first three quarters of 2023, corresponding to a 10.69% R&D expense ratio [58]. - The company has developed advanced manufacturing capabilities, achieving precision processing capabilities below 2μm, which is critical for the production of high-quality connectors [63]. Market Trends - The domestic automotive high-speed connector market is projected to grow significantly, with an expected market size of 390.56 billion yuan by 2027, representing a 202% increase from 2022 [32]. - The penetration of advanced driving assistance systems (ADAS) is expected to drive demand for high-speed connectors, with the market for intelligent driving high-speed connectors projected to grow from 10.05 billion yuan in 2022 to 31.61 billion yuan by 2027, at a CAGR of 25.8% [28][29].