兴业证券-迈为股份-300751-A Great improvement in Revenue and Performance, Laser Equipment Accelerates Growth

　　迈为股份(300751)
　　Company Profile
　　Suzhou Maxwell Technologies Co., Ltd. is a China-based company principally engaged in the design,development, production and sales of intelligent manufacturing equipment. The Company's mainproducts are solar cell screen printing production line complete sets of equipment, single machinesand related accessories. The Company distributes its products in the domestic market and to overseasmarkets. (Source: Reuters)
　　Event
　　Suzhou Maxwell Technologies (the company) released its H120 financial report, stating that it madeCNY 938 million in revenue, up 51.03% year on year (YoY); its net profit attributable to shareholdersrose by 52.77% YoY to CNY 189 million; its net profit after deducting non-recurring items came in atCNY 145 million, an increase of 34.48% from a year earlier; its EPS was CNY 3.64/share, ayear-on-year increase of 52.94%; its weighted average ROE was 13.1%, up 2.75 percentage pointsfrom the previous year.
　　Comments
　　By businesses, the solar cell screen printing production line complete sets of equipment businessrealized CNY 661 million in revenue, up 35.72% from a year earlier, accounting for 70.42% of thecompany’s revenue, signaling the steady growth of the company’s conventional main business.
　　The single machines business hit CNY 239 million in revenue, surging 100.89% YoY, contributing25.47% to the company’s total revenue, up 6.32 percentage points from a year earlier. The surge inthe business was mainly attributed to the rapid growth of income from laser equipment.
　　Since the company launched double-line equipment in 2016, its sales volume and revenue has beenrising. The revenue of the solar cell screen printing production line complete sets of equipment wasall from the double-line model in H120, with the sales volume of 57 sets, up 32.56% YoY and theaverage price of CNY 11.5884 million/ piece, flat with the same period last year
　　The company’s gross margin in H120 was 34.2%, up 1.81 percentage points from the previous year;its net profit rate was 19.44%, down 0.48 percentage points.
　　By quarters, the gross margin for Q220 alone stood at 35.74%, rising 3.55 percentage points from ayear earlier and 3.54 percentage points from a quarter earlier; the net profit rate was 22.61% forQ220 alone, up 4.10 percentage points from a year earlier and 7.28 percentage points form a quarterearlier.
　　By segments, the gross margin of the solar cell screen printing production line complete sets ofequipment, single machines and accessories and others was 31.88%, 36.09% and 62.29%, up 1.68percentage points, down 6.51 percentage points and up 39.58 percentage points from a year earlier,respectively.
　　To strengthen the edge in cost performance and increase the market share rapidly, the companypriced its laser equipment at lower levels, having an impact on the gross margin of the singlemachines.
　　The company’s expenses during the reporting period was CNY 147 million, up 73.31% YoY, taking up15.63% of the revenue and increasing 2.01 percentage points from a year earlier.
　　Among which, the R&D expense registered CNY 58.8869 million, an increase of 79.61% YoY,accounting for 6.28% of the company’s revenue, up 1 percentage point. The increase in the R&Dexpense was mainly due to the increase in the personnel and expenses of R&D.
　　The company inked multiple major contracts with LONGI Green Energy Technology and Tongwei Co.with accumulative amount reaching CNY 1.276 billion. As the contract implementation was at theinitial stage, the unconfirmed revenue totaled CNY 1.2 billion, accounting for 83.48% of the totalrevenue in 2019, boasting huge growth potentials.
　　Earnings forecast and investment recommendation
　　We revised the company’s earnings forecast. Its net profit attributable to shareholders is estimated tobe CNY 354 million/ CNY 469 million/ CNY 644 million for 2020/2021/2022 and its EPS is estimated tobe CNY 6.8/ CNY 9.03/ CNY 12.38, implying a P/E ratio to be 48.5x/36.6x/ 26.7x, respectively, basedon the closing price on July 27th 2020. Reiterate “Outperform”.
　　Potential risks
　　slower-than-expected progress of HJT industrialization; slower-than-expected progress of productioncapacity expansion; intensified competition