occurrences
The company released its quarterly report of 8 2018
The company 2018Q1 achieved operating income of 295 million yuan (+211%), net profit of 87.93 million yuan (+403%), and net profit of 81.15 billion yuan (+341%) after deducting non-return mother's net profit. Gross margin and net interest rate were 48.5% and 29.8% respectively, up 7 pct and 6 pct from the full year of 2017.
Brief review
King Kong Line supports the rapid growth of the company's performance. The industry is about to concentrate on leading companies to further release King Kong line production capacity in the first quarter. The monthly production capacity has now reached 600,000 kilometers from about 300,000 kilometers, and orders are very saturated. Judging from the further increase in advance payments, subsequent orders remain optimistic. We expect that the diamond wire industry will soon enter the reshuffle stage, and the industry share will be concentrated on high-quality and large-scale enterprises. The company's ability to control costs is outstanding, and product consistency and stability are still rising. It is expected that in the price war, gross margin will be basically stable, and it will be able to become one of the ultimate winners in the industry reshuffle.
Progress can be expected for new products such as Extreme Ears, with steady growth
Jiji products have been deeply cultivated for a long time and have been verified by downstream customers for a long time, and are progressing smoothly; customer A's final supply method for wireless charging coils is still uncertain; the traditional conductor and laminated wire business structure will be further optimized; the company has strong material research and development capabilities and cross-industry production support capabilities, and the development and development of new products is still being carried out closely.
Profit forecasting and valuation
The company is expected to achieve net profit of 4.4/61/71 billion yuan in 18-20, corresponding EPS of 4.35/6.01/6.91 yuan. The current PE in 18-20 is 24/18/15 times. Maintain the buying rating, with a target price of 135 yuan.