Summary of the report:
The module business of the company is stable. After the company's module business has experienced rapid growth in the early stage, it will remain stable with the support of Zhonghua Yingguan, the actual controller, and provide a good environment for the transformation of the company.
The company will further transform to three directions: expanding the production capacity of cover glass and producing 3D glass, metal oxide panels and intelligent manufacturing.
Keli, a subsidiary, is regarded as the first domestic enterprise to use the overflow method to produce high-quality cover glass, and the product yield has been raised to 80%. In addition, it has a high production capacity of 3D cover glass with a yield of 50%. After the fixed increase and expansion of production, the production capacity of cover glass has increased by about 11 times. The business income of cover glass and 3D cover glass in the first half of this year is 24.17 million yuan. In 2017, the secondary project of cover glass is in mass production and 3D cover glass is widely used. It is expected that cover glass and 3D cover glass will continue to grow rapidly.
Invest 12 billion to produce IGZO panels. IGZO has more advantages than a-Si and LTPS, especially it can effectively replace a-Si. The IGZO technology of the company is mature, and the project started construction in September 2015 and is expected to be put into trial production in July 2017. Will contribute huge profits to the company.
In terms of intelligent manufacturing, Zhonghua Yingguan, the actual controller, has about 40 years of manufacturing and sales experience in TFT-LCD equipment manufacturing, and the company will make effective use of the talents, technology and experience of the actual controller to develop the domestic market. In addition, the company has cold laser cutting equipment production technology.
The company's fixed increase project has been approved by the Securities Regulatory Commission, if the increase can be successfully completed, a huge amount of capital will help the company's business to move forward smoothly.
Company profit forecast and investment rating. We expect the company's operating income from 2016 to 2018 to be 5.149 billion yuan, 6.21 billion yuan and 12.715 billion yuan respectively, and the net profit attributable to the shareholders of the listed company is 500 million yuan, 600 million yuan and 1.01 billion yuan respectively. Assuming that 900 million new share capital is added this time, the earnings per share are 0.28 yuan 0.34 yuan and 0.58 yuan respectively, and the corresponding PE are 53.3,43.9 and 25.7 respectively. Taking into account the smooth progress of the company's business in many aspects, it is assumed that the company reached 68 times the overall valuation of the electronic sector in 2017, corresponding to a target price of 23.1 yuan, maintaining the company's "highly recommended" rating.