Summary of the report:
The company has the core technology of high-end RF coaxial cable. Shenyu Co., Ltd. is mainly engaged in the R & D, production and sales of RF coaxial cable. Shenyu Co., Ltd. has semi-flexible and semi-rigid RF coaxial cable, low-loss stable phase RF coaxial cable, fine, ultra-fine RF coaxial cable independent production core technology.
The continuous growth of downstream demand of China's RF cable industry drives the expansion of the industry. Radio frequency coaxial cable was first used in the military field. With the rapid growth of the consumer electronics market and the development of the mobile communication industry, radio frequency coaxial cable also has a rapid growth in the civilian field.
From 2007 to 2015, the compound growth rate of the domestic RF coaxial cable market reached 17%. In 2015, the size of China's RF coaxial cable market was about 52.2 billion yuan. It is estimated that the domestic RF coaxial cable market will exceed 85 billion yuan by 2018.
From the perspective of terminal demand, consumer electronics and mobile communication equipment maintain a strong demand for high-end RF coaxial cable, while military demand benefits from import substitution. From 2013 to 2015, the company's revenue from high-end core products accounted for more than 85%.
Upstream cost pressure is expected to ease. The company's comprehensive gross profit margin is sensitive to changes in raw material costs, and the prices of copper and fluoroplastics are currently in a rapid upward cycle. With the release of new capacity raised by the company, continued growth in sales of high-end products is expected to ease the upward pressure on costs.
Company profit forecast and investment rating. The terminal demand of the company's products is strong, and there is broad room for industry scale growth. After the new production capacity reaches production, the growth of high-end product income will drive the company's net profit to improve.
It is estimated that the net profits of shareholders belonging to listed companies from 2017 to 2019 are 44.32 million yuan, 55.3 million yuan and 66.56 million yuan respectively, and earnings per share are 0.55 yuan 0.69 yuan and 0.83 yuan respectively. Give the company a 6-month target price of 49.5 yuan and give the company a "recommended" rating.
Risk tips: risk of rising raw material prices; lower-than-expected risk of capacity release; risk of industry competition