Matters:
The company disclosed its report for the first quarter of 2018: it achieved operating income of 253 million yuan during the reporting period, an increase of 43.65% over the previous year, and the net profit of the mother was 30 million yuan, an increase of 38.54% over the previous year.
Key Views
1. Driven by innovation, expanding the market, expanding the scale, and greatly improving the company's performance
The company's revenue for the first quarter of 2018 was 253 million yuan, an increase of 43.65% over the previous year, and the net profit of the mother was 30 million yuan, an increase of 38.54% over the previous year. The main thing was that during the reporting period, the company increased its market development efforts and dug deeper into the market space; newly developed products in the laser field and automation equipment field brought new performance growth points to the company; the subsidiary Jibin Technology acquired 100% of the shares of Shenzhen Huadongxing Technology and included Huadongxing in the first quarter.
The company's profitability remained stable, and gross margin and net interest rates were basically the same as the same period last year.
2. The policy focuses on supporting the intelligent upgrading of the manufacturing industry, and there is huge space in the 3C field
China's manufacturing industry is on the cusp of industrial upgrading. The State Council and the Ministry of Industry and Information Technology have continuously issued relevant documents emphasizing that intelligent manufacturing is the direction of industrial upgrading. In the two sessions in 2018, “intelligent manufacturing” was included in the government work report, “Made in China 2025” was implemented to promote major projects such as a strong industrial base, intelligent manufacturing, and green manufacturing. Accelerating the development of advanced manufacturing will be a key direction of work.
3C consumer electronics is one of the fields outside of the automotive industry where there is the greatest room for upgrading intelligent manufacturing. Consumer electronics products continue to develop into miniaturization, refinement and portability, innovative applications continue to accelerate, it is becoming more and more difficult for labor to meet process requirements, compounded by rising labor costs, and the demand for intelligence is becoming more and more urgent.
3. Strategically position intelligent manufacturing solution suppliers to complete in-depth technology layout+market diversification
The company has deepened its layout in intelligent related technologies through endogenous epitaxial, completed the technical layout of software, machine vision, automated production line solutions, etc., and initially has intelligent manufacturing system solution capabilities.
The market is diversified and expanded. The company and its subsidiaries cover different segments related to consumer electronics such as PCBs, lithium batteries, display panels, LEDs, etc., and have obtained long-term stable cooperative relationships with many well-known enterprises. It has rich customer resource advantages, which guarantee market demand.
In the short term, downstream display panels and lithium batteries are developing rapidly, and the PCB industry continues to pick up. At the same time, the company continues to develop and launch new products in line with market demand, which is expected to follow the continuous growth of the industry. In the long run, with the continuous integration of the company's technology and market, intelligent manufacturing solution capabilities will gradually increase, and it is expected to expand into more fields and achieve continuous growth.
4. Profit Forecast
We expect the company's net profit to be 311/4.14/537 million yuan for 18-20 years, the corresponding EPS is 1.58/2.10/2.72 yuan, and the corresponding PE is 18/13/10 times. Maintain a “Recommended” rating.
5. Risk warning
Downstream demand falls short of expectations, business integration falls short of expectations, and risk of gross margin decline