Lens(300433)2024-07-17 02:01Key Points Industry and Company - Company: Lishen Technology - Industry: Apple supply chain, smartphone manufacturing, high-tech manufacturing Core Views and Arguments - Market Share: Lishen Technology holds approximately 60% market share in the Apple supply chain. - Competitive Strength: The company is strengthening its competitiveness through capital investment, personnel expansion, and automation. - AI Innovation: Lishen Technology is actively investing in AI innovation, particularly in the field of metal components, to improve profitability despite rising smartphone return rates. - Design Contributions: The company is expected to play a key role in future design schemes, especially in the application of glass and metal materials. - Revenue Forecast: Analysts predict the company's smartphone shipments will reach about 220 million units next year, significantly boosting profitability if product performance exceeds expectations. - Valuation: Analysts believe Lishen Technology is currently undervalued, with a forward P/E ratio of about 20, and has the potential to benefit from the long-term trend of AI terminalization. - Material Expertise: The company has accumulated extensive experience in innovative materials, particularly in the blue series, including glass cover plates, sapphire, ceramics, and plastics, successfully applied to products like the Apple Watch. - Revenue Diversification: Lishen Technology has expanded its metal processing capabilities to serve multiple industries, including smartphones, new energy vehicles, and wearable devices, diversifying its revenue sources. - Cost Optimization: The company has maintained high gross and net margins through cost control and efficiency improvements, such as optimizing direct material costs, reducing labor costs, and improving asset utilization. - New Production Base: The launch of the latest production base further solidified the company's position in the smartphone assembly market and plans to provide more integrated supply chain services. - R&D Investment: Lishen Technology has invested heavily in R&D, obtaining a national enterprise technology center certification and accumulating a large number of effective patents, maintaining a leading position in high-end smartphone appearance components, special glass production, and precision processing. - Profit Growth: The report predicts the company's profitability will continue to grow in the next two years, with an estimated valuation of about 20 times. Other Important Content - Customer Concentration: The company's largest customer contributes about 55% to 71% of its revenue, and revenue growth has historically been driven by the demand changes of the largest customer. - Component Business: About 70% of the company's component business comes from Apple, indicating its involvement in system-level product development. - Cost Structure: Direct material costs accounted for 49% and labor costs for about 30% in 2020, rising to 61% and 24% respectively, while depreciation and electricity costs remained relatively stable. - Technological Advantages: Lishen Technology has demonstrated significant advantages in technological innovation, with cumulative R&D investment of 152 billion yuan since its listing in 2015, a national enterprise technology center certification, and annual R&D investment of 20 billion yuan from 2021 to 2023. - Customer Contribution: Apple's large customer has contributed about 300 to 330 billion yuan in revenue over the past three years, accounting for about 80% of the company's total revenue, with revenue contributions ranging from 111 to 140 billion yuan. - System-Level Product Potential: Lishen Technology has potential for product development and market expansion in areas such as tablets (Pad), personal computers (PC), and wearable devices, as well as steady growth in the automotive business.