Key points of performance
According to the company's annual report for 2016, during the reporting period, the company's total operating income was 4.9939369 billion yuan, up 28.54% from the same period last year; the total profit was 174.6635 million yuan, up 134.12% from the same period last year; and the net profit belonging to shareholders of listed companies was 146.0519 million yuan, up 124.42% from the same period last year.
Investment suggestion
The company is mainly engaged in the R & D and manufacture of various window protection screens, touch display modules and precision structural components, mainly used in consumer electronic products such as mobile phones and tablet computers. Relying on its own advantages, the company is committed to becoming a "one-stop solution provider for intelligent terminal components" to establish an industrial chain with competitive advantages through vertical integration, relying on upstream and downstream resource allocation, effectively reduce production and procurement costs, improve production efficiency, shorten product delivery time, enhance adhesion with customers, and provide convenience for customers. With the rising trend of "double glass + metal frame" solutions in the consumer electronics industry, the company acts as a leader in plastic structural parts, while actively laying out metal structural parts and 3D curved screens. We believe that the company's future growth is expected to benefit from the huge market space and new performance growth points.
We forecast the EPS of the company from 2017 to 2019 to 0.33,0.62,1.02 yuan, corresponding to 36X and 19XMagi 12X, respectively, and give the "recommended" rating for the first time.
Performance review
Reorganization of main business, extension of mergers and acquisitions: the company doubled the net profit belonging to shareholders of listed companies in 2016 because: on the one hand, after the main business was restructured and expanded to the field of touch screens and precision structural components, continue to maintain the technological advantages of continuous innovation, while the improvement of internal management has achieved results. On the other hand, the operating results of Shenzhen Lianmao, a wholly owned subsidiary of the company, have been included in the merger since July 2015. Compared with the same period last year, the reporting period increased the operating results of Shenzhen Lianmao from January to June 2016. Shenzhen Lianmao business is progressing smoothly during the reporting period.
Based on touch business, high-quality customers escort: the company's main business is touch display products including full-laminated screen, capacitive touch screen, resistive touch screen. Touch display products accounted for 46.79% of the company's total revenue in 2016, of which the full-screen revenue was 1.763 billion yuan, an increase of 44.53% over the same period last year. Although the growth rate of global smart phones is slowing down, the focus of the market is gradually moving closer to China, which will be conducive to the development of related enterprises in the domestic smart phone electronic components industry chain. The company's core customer base covers Huawei, Lenovo, OPPO and other domestic first-tier brands, as the only company with one-stop production capacity, will fully benefit.
Precision structural parts are growing rapidly, and metal structural parts have made a profit: the rapid development of the consumer electronics market has promoted the large-scale expansion of precision structural parts, which makes the precision structural parts industry maintain a rapid growth rate. In the field of precision structural parts, the company always pays attention to the research and development of precision moulds, further optimizes production equipment and process technology, and realizes continuous technological innovation. Shenzhen Lianmao, a subsidiary, is the leader in the plastic structure industry and has core competitiveness. The company has invested 400 million yuan in the metal structure business and has made a profit. We believe that with the industrial and technological advantages of the combination of plastic and metal CNC technology, the company will continue to maintain a leading position in the industry through the continuous development and improvement of multi-industry and multi-variety product structure, expansion and strategic integration.
2.5D glass + 3D glass is expected to benefit from consumer electronics appearance innovation for a long time: on the one hand, the wave of "double glass + metal frame" is unstoppable; on the other hand, 3D glass-related products appear one after another in the market and have a volume trend, which will lead the innovation direction of consumer electronics appearance in the future.
The mobile window protective glass industry chain will usher in an upward inflection point, which is an important opportunity for the next wave of technological innovation of smart phones in the future. The company originated in the mobile phone window protective glass business, has accumulated profound technical experience and advantages, 2.5D glass business yield qualified smooth development, is about to achieve full mass production, and according to market demand in the field of 3D curved glass cover in advance layout. The company is currently a major supplier to Huawei and strives to occupy a place among OPPO and vivo suppliers in an effort to expand market share. We believe that the hundreds of billions of mobile window protective glass market is about to break out, and the company will welcome the vast blue sea of window protective screen.
Risk hint: traditional business performance is declining, new business expansion is not as expected.