Main points of investment
Matter: the company announced that it has signed a "business cooperation agreement" with Baixin Technology (Hong Kong) Co., Ltd.
Peace viewpoint:
Hand in hand with Baixin Technology to expand the distribution territory: the company announced that Sun Company had signed a "Business Cooperation Agreement" with Baixin Technology (Hong Kong) Co., Ltd., and Baixin Technology promised to obtain the distribution authorization of Zhaoyi Innovation Technology Co., Ltd. or GigaDevice Semiconductor (HK) Limited FLASH product line before November 1, 2017. When the cooperation is finally completed, the company will be the next in the field of microprocessors and MMC (microstorage). Zhaoyi Innovation has a leading domestic production line and strong production capacity support, its products are NOR Flash, NAND Flash and MCU, etc., the company's market share in serial NOR Flash is the third in the world, the first in China, and the first in SPI NAND Flash. At present, the company distributes products including fingerprint identification chips, connectors, sensors and other semiconductor components. Through Zhaoyi Innovation, MTK, SK Hynix and other attractive electronic products sold on the company's industrial Internet platform, it can attract more small and medium-sized customers to the platform, help to expand the registered users of the platform and increase the stickiness of the platform.
Memory prices continue to rise, distributors may benefit: according to IC Insights data, Q2 Flash prices grew at an average quarterly rate of 16.8% from Q3 in 2016 to 2017. According to IC Insights, the full-year increase in DRAM prices this year will reach the highest level since 1993, reaching 63%. The price increase of Flash Flash will also reach a record 33%. Yingtang Intelligence acquired 48.45 per cent of Lianchuangtai and distributed MTK and Hynix chips. Lianchuangtai is an authorized distributor with rich experience in the distribution of electronic components, and it is the only one in the domestic electronic components distribution industry that owns MTK's master chip, SK Hynix and the international famous memory brand. The distribution rights of the strong resource product line and the successful cooperation with Zhaoyi Innovation will further determine the position and advantages of Lianchuangtai in the industry. Yingtang Intelligent Control transformational distributors have achieved initial results, with high performance growth over the past 16 years. The acquisition of a 48.45 per cent stake in Lianchuangtai will strengthen MTK and Hynix chip distribution, and performance is expected to continue to grow in the future. At the same time, the management of the company actively promotes the share buyback of 400 million yuan, demonstrating their confidence in the future development of the company.
Investment strategy: with the transfer of the electronic information industry to China, we are optimistic about the transformation of Yingtang Intelligence Control in electronic distribution and the Internet of things. We estimate that the company's operating income from 2017 to 2019 will be 80.54 Universe 11.2777 Universe 14.661 million, and the net profit from its parent will be 2.93 Plus 387,000,000 Yuan, respectively, and the corresponding EPS will be 0.270.36Compare 0.47 Yuan, respectively, and the corresponding PE will be times higher than that of 29-22-17, maintaining the "recommended" rating.
Risk tips: intensified competition in the industry; agency authority risk.