It is expected that the net profit in the first quarter of 2017 will increase by 250% Mel 300% compared with the same period last year, which is in line with the expected results forecast issued by the company for the first quarter of 2017. 2017Q1 is expected to return home net profit of 1.4% to 160 million, an increase of 250% won 300% over the same period last year. In the first quarter of 2017, the company's operating situation and product prices continued the good trend since the third quarter of last year, and the profitability of the main business was significantly enhanced. 2017Q1 performance in line with expectations, further verify our judgment since August 16: upstream copper foil, fiberglass cloth and other raw materials continue to rise in prices, downstream PCB demand recovery under the comprehensive influence of the company copper clad laminate production and sales and product prices have effectively increased, net profit continued to increase.
Prices of raw materials and copper clad laminate are expected to continue to rise.
In the off-season of Q1 consumer electronics and the downturn of the new energy vehicle market, copper foil prices maintain their original high level and the rising trend slows down. It is expected that with the recovery of the consumer electronics and new energy vehicle markets in the second and third quarters, copper foil prices are expected to restart the upward trend; while the contradiction between supply and demand of fiberglass yarn and fiberglass cloth continues, prices are expected to continue to rise in the first three quarters.
The rise in raw material prices will stimulate copper clad laminate manufacturers to periodically increase prices and obtain excess profits, and the relevant manufacturers will usher in the improvement of performance elasticity in this cycle of price increases. The company can flexibly adjust the product structure, so as to maintain the operating rate, and has its own 82.56 million-meter electronic grade fiberglass cloth production capacity, with cost advantage.
The demand for medium and heavy plate continues to grow, and the company is facing small and medium-sized customers. Real estate sales have grown rapidly since 2016, and the prosperity of the air-conditioning and other home appliance industry has improved under the influence of the real estate post-cycle. According to industry online news, domestic shipments of air conditioners increased by 115.5% in February 2017 compared with the same period last year, while exports increased by 43.4%. Both domestic sales and exports accelerated. Household appliances is one of the main application areas of medium and heavy plate, the improvement of the industry boom has led to a great increase in plate demand, and the effect of price increase has been conducted smoothly. The company is a medium-thick copper clad laminate leader, for small and medium-sized customer groups, strong bargaining power, copper clad laminate price flexibility, high annual performance growth is expected.
Risk hint
The price increase of the product is not as expected, the production expansion is not as expected, and the demand in the downstream market is weak.
Maintain a "buy" rating
The company is a medium-thick copper clad laminate bibcock, which is a highly elastic variety in the price rise cycle of raw materials. The net profit for 2017 / 18 is expected to be 10.10 / 1.534 billion, eps is 1.39x2.11 yuan, and the current share price is corresponding to PE of 13max 9X, maintaining the "buy" rating.
