Main points of investment
Xinli International recently announced that Xinli Electronics, a wholly-owned subsidiary, has set up a joint venture with Renshou County, Meishan City, Sichuan Province to build the fifth generation TFT-LCD. The total investment of the joint venture is 12.5 billion yuan, of which the registered capital is 7 billion yuan, and 500 million yuan is contributed by Xinli Electronics, accounting for 7.14%. At the same time, the company terminated the memorandum agreement on the establishment of a joint venture with Shucheng County, Lu'an City, Anhui Province and Huaxia Happiness Ji Ye.
Panel production capacity continues to expand, focusing on small and medium-sized professional display field. Xinli International invested 500 million yuan to invest in the fifth generation TFT-LCD project in Renshou County, expanding panel manufacturing capacity again after building Huizhou G4.5 and purchasing Samsung L5 production line in 2016. The Renshou project is expected to focus on the production of high-precision small and medium-sized panels, which will help to further consolidate the company's advantages in the field of small and medium-sized professional display panels.
The new project is located in Renshou, Sichuan, with developed panel industrial clusters. Sichuan Province is one of the four regional electronic information industry bases in China, with a complete industrial chain. In recent years, a large-scale LCD panel industry cluster has been formed around Chengdu. Xinli International's fifth-generation TFT-LCD project is located in Renshou County, Meishan City, only 50 kilometers away from Chengdu. The location of the project is in an industrial cluster, which enables the company to enjoy better technology, supply chain and talent dividends.
The strength of the partner is strong to protect the project. Project partner Fang Renshou Investment and Sichuan Ji'an Fund have good local resources and mature experience in project introduction, which will not only participate in capital contribution, but also protect the construction and operation of Xinli international panel project.
Investment suggestion: capacity expansion will help to further enhance the company's position and voice in the LCD panel industry, especially in the field of small and medium-sized professional display panels. At the same time, the introduction of partners will greatly reduce the pressure on the company's capital expenditure. With the gradual climbing of the production capacity of Huizhou 4.5 generation line and the commissioning of Shanwei and Renshou 5th generation line, the company's panel production capacity will continue to rise to a new level. At present, the stock price corresponds to PE10.3 times and PB1.19 times, and the valuation is low, so investors are advised to keep their attention.
Risk tips: panel market prices fall, production line climbing progress is slow, RMB depreciation.