Shenzhen Textile A starts two wide polarizer production lines for additional issuance.
The company plans to increase the capital of the company's wholly-owned subsidiary Shengbo Optoelectronics to build the second phase project of TFT-LCD polarizer, a total of two 1490mm-wide TFT-LCD polarizer production lines, respectively, Line 6 and Line 7, with an investment of about 1.24 billion during the project construction period and a working capital of 2.3 billion.
The company's additional offering is at the right time, in the right place and in the right place.
The bottleneck of raw material supply is gradually disappearing, and the historical opportunity of polarizer import replacement has come. At the same time, the company has the ability to mass-produce polarizers for large-size TFT.
The construction of Gaoshi generation line in China has a great demand for polarizers. However, large international manufacturers only have back-end cutting factories in China, and the transfer of front-end factories is difficult, so domestic polarizing film enterprises will have a lot of room for development.
The company's polarizer business is located at the top of the smile curve of the TFT-LCD industry chain and is strongly supported by the state, the government and shareholders. It also has the opportunity to drive the production of upstream TAC and PVA films, as well as derivative industries including 3D display applications and more than 100 billion markets.
We believe that this additional offering can be summarized into ten words: "the time is ripe, this road must be taken."
This additional issue project is very critical to the smooth implementation of strategic transformation of the company. Under the mature conditions including technology, management and talents, the SEO project will quickly help the company to open the peer gap, gain large-scale advantages and step into the path of rapid development.
Maintain the company's "recommended" rating
We judge that the company's expenditure in the first phase of the production line in 2012 and depreciation after the replacement of new equipment will bring performance growth pressure, but 2013 will gradually step into the track of rapid development, with a forecast of EPS of 0.04 and 0.25 respectively from 2012 to 2013, taking into account the company's future leading position in the domestic polarizer industry and the rapid opening of profit space and flexibility, maintain the "recommended" rating of the company.
Risk hint
The progress of the project was lower than expected, the yen appreciated too fast, and the yield climbed lower than expected.
