Events:
The company issued an announcement for the first quarter of 2018, with operating income of 396 million yuan during the reporting period, an increase of 12.53% over the same period last year, and a net profit of 21.702 million yuan for shareholders of listed companies, an increase of 72.07% over the same period last year. Shareholders belonging to listed companies deducted 19.649 million yuan in non-net profit, an increase of 98.26% over the same period last year, and the performance achieved rapid growth.
The power semiconductor market continues to be booming, and new applications in the industry create new markets. Since the second half of 2016, the power semiconductor market has begun to pick up and remain high. According to IHSMarkit, the global overall power semiconductor market, including power discrete components and power modules, reached US $38.3 billion in 2017, representing a growth rate of about 7.5%. At the same time, with the development of new energy vehicles, industrial Internet of things and other industries, the downstream application market of power semiconductors continues to expand, we expect that the industry will continue to maintain a high demeanor in 2018, and related companies in the industrial chain are expected to continue to benefit.
The three fee rates are lower than the same period last year and are expected to be sustainable for the whole year. During the reporting period, the company's management expense rate, financial expense rate and sales expense rate were 7.74%, 3.96% and 2.29% respectively, which decreased significantly compared with the same period last year (management expense rate, financial expense rate and sales expense rate were 9.60%, 4.13% and 2.75% respectively). The decline in the three-fee rate further confirms our judgment on the continuous improvement of the downstream application of the company, and also shows that the level of corporate governance continues to strengthen. We believe that the application of power semiconductors will remain high throughout the year, and the three fee rates are expected to continue to decline.
It is planned to build a new eight-inch production line, and the dominant position of the industry will be further consolidated. The company announced in January that the capital raised by the proposed public offering of shares will not exceed 1 billion yuan, and the net amount after deducting the issuance expenses will be used for the construction of the new power electronic devices base project (Phase II). After the completion of this project, the company will have the processing capacity of 240,000 8-inch chips per year. After the completion of the production line, the company's technological advantages will be further enhanced, the product structure will be further optimized, and the industry leading position will be further consolidated and strengthened.
Investment advice: buy-An investment rating. We estimate that the company's net profit from 2018 to 2020 is 138 million yuan, 186 million yuan and 246 million yuan respectively, and the net profit growth rate is 45.3%, 34.7% and 32.7% respectively, and the corresponding EPS is 0.18,0.25,0.33 yuan per share. Considering the trend of industry resource integration, the company has a strong expectation of endogenous and epitaxial development; military industry / new energy needs to break through urgently, and high value-added new products continue to optimize profitability. In view of the high growth of future performance and the high valuation center of the potential breakthrough industry, the monthly target price of 56 times PE,6 in 2018 is 10.27 yuan.
Risk Tip: macroeconomic downturn, product expansion in new application areas is not as fast as expected