Investment logic
Successfully transformed the new material business from the traditional film business. Since 2011, the company has vigorously developed photovoltaic, lithium electronics and other emerging industries and spun off the original film business, and is gradually forming three major business layouts of image materials, photovoltaic materials and lithium materials. In 2016, the company achieved a revenue of 1.183 billion yuan and a net profit of 41 million yuan. After experiencing the pains of transformation, the company returned to profit growth and successfully transformed from a traditional film manufacturer to a new material company.
The photovoltaic backplane is booming and the lithium battery diaphragm will be put into production soon. While the performance of the company's photovoltaic backplane continues to improve, the production capacity continues to expand, and it is expected that the production capacity of the No. 8 production line can be increased by 5 million square meters, which will effectively help the company's photovoltaic backplane business to continue to expand. In addition, the construction of the company's high-end diaphragm project is nearing completion, and the overseas patent layout starting from Japan is expected to reach production by 2017, with a pre-tax profit of 61.07 million yuan. High-end lithium battery diaphragm business is expected to become a new performance growth point of the company.
The company is an important platform for civil-military integration under the Aerospace Science and Technology Group, and will benefit Hebei Aerospace Industry Group. The company is an important platform for civil-military integration of the group, and has in-depth cooperation with other scientific research institutes of Aerospace Science and Technology Group in lithium diaphragm, photovoltaic backplane and other business. In addition, the company is located in Baoding, Hebei Province, located in the coordinated development area of Beijing, Tianjin and Hebei, adjacent to the Gu'an Aerospace Industry Group, and will directly benefit from the radiation effect of the joint development of other industries of the Group in the future. According to the description of the No. 1 document of the Aerospace Science and Technology Group in 2013, we judge that the company is expected to become the focus of the integration of military resources of the Aerospace Science and Technology Group.
Valuation and investment advice
Lucky Film spun off its traditional film business in 2012 and is currently a subsidiary of Lucky Group engaged in the research and production of new materials. In the company's three major business layouts, photovoltaic materials are rising with the industry, lithium materials are expected to be released in 2017, image materials business is becoming increasingly stable, which can provide effective performance support for the company. In addition, the company is located in the hinterland of the Beijing-Tianjin-Bao Triangle and is expected to directly benefit from the Gu'an Aerospace Industry Park and the coordinated development strategy of Beijing-Tianjin-Hebei and become the focus of the group's military industrial resources integration.
We estimate that the company's net return profit for 2017-2019 will reach 0.590.74 billion yuan, a year-on-year growth rate of 43.03%, 25.13% and 24.44%. We believe that the company has clear expectations for future performance growth and is expected to benefit from the reform process of the Aerospace Science and Technology Group, giving the company a target price of 18 yuan in the next 6-12 months, covering it for the first time and rating "buy".
Risk
The production of lithium battery diaphragm project is not as expected; the growth rate of photovoltaic industry is not as expected; the market scale of traditional photosensitive materials and image materials is greatly reduced; and the process of asset integration is not as expected.