Main points of investment
A Shi Chuang: domestic coating materials are scarce, which is expected to loosen the pattern of foreign monopoly. Ashi Chuang has mastered rich core technologies such as PVD coating material preparation technology, diversified target binding, back plate precision processing, etc., and has successfully established a more comprehensive product supply system. The products are involved in flat panel display, optical components, energy-saving glass, semiconductors, solar cells and other fields, which is expected to loosen the monopoly pattern of multinational companies in the United States, Japan and Germany. With the continuous growth of downstream consumer electronics demand and the strong support of national policies, Ashi Chuang will usher in a "rising period" of enterprises and occupy a certain market share.
Sputtering target: expand production capacity, bright prospects. Sputtering coating is the most important method for the preparation of thin film materials, and sputtering targets are also the most widely used PVD coating materials in the market. The global market for high-purity sputtering targets is about US $11.36 billion in 2016. it is estimated that by 2019, the global market for high-purity sputtering targets will exceed US $16.3 billion, with an annual compound growth rate of 13%. With its advanced target preparation technology, rich product system and reliable quality assurance, A Shi Chuang has rapidly expanded its market share and reached the cooperation of many upstream and downstream enterprises. In addition, the company will use the raised funds to invest in the construction of "350 tons of flat panel display sputtering target construction project" to actively expand the production capacity of flat panel display sputtering targets and enhance the market competitiveness of the company's products.
Evaporation material: the market is vast and the profit is considerable. The company uses different raw materials, formulations and processes, and has so far developed hundreds of evaporation materials. The application fields of evaporation materials developed by the company include optical components, LED, flat panel display and semiconductor splitters. Domestic LCD panel factories continue to expand their production capacity and are expected to have a market share of 35% in 2018; smartphone shipments have increased significantly, reaching 1.47 billion units in 16 years; and car cameras are expected to grow at a compound rate of 30% from 2015 to 2020. The downstream application market of evaporated materials is broad, and the profit space is large, which is expected to maintain a rapid growth trend in the next few years.
Profit forecast and investment advice. It is estimated that the EPS in 2017-2019 will be 0.65,1.29,2.09 yuan respectively. As the scarce target of the domestic PVD coating material industry, considering the high growth trend of the company in the next few years, the company will be valued 80 times in 2018, corresponding to the target price of 103.2 yuan, covering for the first time and giving a "buy" rating.
Risk hint: the demand in the downstream of the industry fluctuates periodically; the growth rate of the company's PVD coating material business may not be as expected; the fund-raising project will be put into production and the production schedule may not be as expected.