Kunshan Dongwei Technology (SH:688700)2024-05-13 09:02Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation that the stock price will outperform the benchmark index by more than 20% over the next 6-12 months [12][20]. Core Views - The company reported a revenue of 909.23 million RMB in 2023, a decrease of 10.13% year-on-year, and a net profit attributable to shareholders of 151.43 million RMB, down 29.01% year-on-year. The decline is attributed to the downturn in the PCB industry and slower-than-expected industrialization of composite copper foil [4][5]. - Despite the current challenges, the company is positioned to benefit from a recovery in downstream demand and the release of composite copper foil demand, as it is the only company globally capable of large-scale production of roll-type membrane material electroplating equipment [4][12]. Financial Summary - In 2023, the company's gross margin was 41.72%, a slight decrease of 0.15 percentage points year-on-year. The net profit margin fell by 4.43 percentage points to 16.65% due to increased expense ratios [4][5]. - The company’s revenue projections for 2024-2026 are 1.156 billion RMB, 1.793 billion RMB, and 2.167 billion RMB, respectively, with net profits expected to be 209 million RMB, 347 million RMB, and 447 million RMB [4][17]. - The earnings per share (EPS) for 2024-2026 are projected to be 0.91 RMB, 1.51 RMB, and 1.95 RMB, with corresponding price-to-earnings (P/E) ratios of 43.0, 25.9, and 20.1 [4][15]. Market Position and Product Development - The company has introduced new products in the PCB sector, including three-in-one horizontal plating equipment and ceramic electroplating, which align with the structural demands of high-end HDI and high-speed PCBs [4][5]. - In the renewable energy sector, the company has successfully shipped its vertical continuous electroplating line for silicon wafers and developed new vacuum aluminum plating equipment, indicating a strong pipeline for future growth [4][5].