Kunshan Dongwei Technology (688700)2024-11-14 10:22Investment Rating - The report gives a "Buy" rating for the company, Dongwei Technology [3][5]. Core Views - Dongwei Technology is a leading domestic electroplating equipment manufacturer, with downstream applications covering PCB, general hardware, and new energy sectors. The company has shown a revenue CAGR of 19.8% and a net profit CAGR of 19.5% from 2019 to 2023, while maintaining a high R&D investment rate of approximately 8% during the same period [2][3]. Summary by Sections 1. Company Overview - Established in 2005, Dongwei Technology has developed a strong presence in the electroplating industry, launching its first vertical continuous plating (VCP) equipment in 2006 and expanding into PCB and general hardware electroplating by 2007. The company has also actively entered the composite copper foil and photovoltaic electroplating markets [2][15]. 2. Business Fundamentals - The PCB and general hardware electroplating businesses provide a solid foundation for the company. The PCB electroplating sector is expected to recover significantly in 2024, with the company anticipating PCB orders to exceed the historical peak of 2021, driven by trends in Southeast Asia, AI servers, and automotive electrification [2][21]. - The company holds over 50% market share in domestic VCP equipment and is expanding its product range to include various mature wet processing equipment [2][24]. 3. New Energy Sector Growth - The new energy business, particularly in composite copper foil and photovoltaic electroplating, is opening new growth avenues. The composite copper foil offers significant advantages over traditional materials, and the company has established a comprehensive product matrix for this sector, achieving sales revenue of 338 million yuan in 2023 [2][3][21]. - The photovoltaic electroplating equipment has also been validated by customers, indicating strong market potential [2][3]. 4. Financial Projections - The company is projected to achieve revenues of 1.03 billion yuan, 1.69 billion yuan, and 2.11 billion yuan for the years 2024, 2025, and 2026, respectively, with year-on-year growth rates of 13%, 64.6%, and 24.7%. The net profit is expected to reach 153 million yuan, 317 million yuan, and 418 million yuan during the same period, with corresponding growth rates of 1.1%, 107.1%, and 31.9% [3][5].