FRD(300602) 国海证券·2024-02-26 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 13.71 RMB per share [10][120] Core Views - The company is a leading provider of electromagnetic shielding and thermal management solutions, benefiting from the rise of multiple product categories from Huawei [13] - The company is expected to benefit from the AI-driven demand for server cooling solutions, as well as the growth in communication, consumer electronics, and new energy sectors [120] - The company's revenue is projected to grow from 4.12 billion RMB in 2022 to 8.55 billion RMB in 2025, with net profit increasing from 96.19 million RMB to 607.47 million RMB over the same period [120] Company Overview - The company is a leading provider of electromagnetic shielding and thermal management solutions, with a product portfolio that includes electromagnetic shielding materials, thermal management materials, and base station antennas [25] - The company has a strong customer base, including Huawei, Microsoft, Lenovo, and Tesla, across various industries such as consumer electronics, AI, servers, and new energy vehicles [28] - The company has a robust R&D capability, with 641 patents as of June 2023, and a focus on developing advanced cooling solutions such as single-phase and two-phase liquid cooling modules [33] Technological Innovation - The company has a comprehensive product line and technical expertise in electromagnetic shielding and thermal management, including conductive fabric gaskets, metal shielding devices, and liquid cooling solutions [3] - The company has accumulated significant know-how in product design, manufacturing, and testing, enabling it to provide customized solutions to customers and enhance its competitive barriers [3] - The company is involved in the R&D and design stages of customer products, allowing it to offer integrated solutions that shorten development cycles and improve product reliability [3] Manufacturing and Sales Network - The company has manufacturing bases in Shenzhen, Changzhou, Dongguan, and Vietnam, as well as sales offices in major economic regions in China and overseas locations such as the US, Finland, and India [4] - The company's local manufacturing and sales network enables it to provide localized services to customers, enhancing customer satisfaction and loyalty [4] Financial Performance - The company's revenue grew from 3.25 billion RMB in 2022 to 3.70 billion RMB in 2023, with a projected increase to 4.20 billion RMB in 2024 [1] - The company's gross margin and net margin have shown a recovery trend after a decline in 2020 due to factors such as rising raw material prices and trade conflicts [6][7] - The company's R&D expenses have been steadily increasing, reaching 249 million RMB in 2022, accounting for 6.05% of its revenue [7] Server Business - The company is a core supplier of cooling solutions for servers, providing both air-cooling and liquid-cooling products to customers such as Huawei, ZTE, and Inspur [49] - The company has developed advanced liquid cooling technologies, including single-phase and two-phase liquid cooling modules, and has a competitive advantage in thermal interface materials [55] - The company's liquid cooling solutions are expected to benefit from the growing demand for AI-driven data centers, with the global liquid cooling server market projected to grow at a CAGR of 38% from 2023 to 2025 [74] Smart Hardware and New Energy Business - The company's smart hardware business is expected to benefit from the recovery of Huawei's smartphone sales and the growth of AI PCs, with the company providing cooling and electromagnetic shielding solutions for these products [81][98] - The company's new energy business is growing rapidly, with orders for new energy vehicles and charging piles increasing significantly in 2023H1 [107] - The company is also benefiting from the growth of the photovoltaic and energy storage markets, with its products being supplied to major customers such as Huawei and Sungrow [107] Profit Forecast - The company's revenue is expected to grow from 4.12 billion RMB in 2022 to 8.55 billion RMB in 2025, with net profit increasing from 96.19 million RMB to 607.47 million RMB over the same period [120] - The company's EPS is projected to increase from 0.19 RMB in 2022 to 1.05 RMB in 2025, with a corresponding decrease in the P/E ratio from 75.74x to 13.05x [120]