Union Precision(SH:688210)2024-03-13 07:40Group 1: Company Overview - Shenzhen Fan Hai Tong Lian Precision Manufacturing Co., Ltd. specializes in high-precision, high-density, and complex-shaped precision components, aiming to become a leading MIM (Metal Injection Molding) manufacturer and comprehensive solution provider for precision parts [2][3] - The company focuses on the application of metal materials and has gained recognition from top domestic and international clients for its MIM, CNC, and laser processing capabilities [3] Group 2: Business Performance - In 2023, the revenue from MIM precision components was approximately CNY 330 million, remaining stable compared to the previous year [4] - The non-MIM precision components business generated around CNY 220 million, showing a year-on-year growth of approximately 38% [4] - The overall gross margin for the company in 2022 was around 42%, with MIM business gross margin close to this figure and non-MIM gross margin exceeding 35% [4][5] Group 3: Future Prospects - The company is optimistic about the future market for foldable smartphones and has introduced hinge components for these devices, which began generating sales in Q2 2023 [4] - The company does not currently plan to engage in assembly but aims to explore and develop more opportunities within the precision components sector [5] Group 4: Financial Insights - The decline in net profit for 2023 was attributed to increased R&D expenses (up CNY 21.72 million), reduced foreign exchange gains (down CNY 14.04 million), and higher share-based payment expenses (up CNY 9.26 million) [5][6] - The company has no immediate refinancing plans but will consider it based on operational needs and market conditions [6] Group 5: R&D and Production - The R&D cycle for new product development typically ranges from 6 to 12 months, while upgrades for existing products may take 3 to 6 months [6] - The Changsha MIM production base is operational, with lower depreciation costs compared to leased facilities [5] Group 6: Industry Context - The MIM industry is relatively fragmented, with major players including Jiangsu Jingyan Technology Co., Ltd., Quanyi Technology (Foshan) Co., Ltd., and Amphenol FCI [7] - The estimated share-based payment expenses for 2024 are projected to be around CNY 23 million, with additional costs expected from the employee stock ownership plan [7]