Matters:
The company released a performance forecast for the 2018 semi-annual report. During the reporting period, the company expects to achieve net profit of 106 million yuan to 131 million yuan, an increase of 30%-60% over the previous year.
Commentary:
Optimizing the industrial layout, focusing on technological innovation, and driving continuous performance growth, the company expects to achieve net profit of 106 million yuan to 131 million yuan in the first half of the year, an increase of 30%-60% over the previous year. The main reason is the company's overall boom in downstream LCD modules, lithium batteries, PCB, welding and other industries. The expansion of production capacity for downstream customers has driven the expansion of the company's sales scale of LCD modules, lithium battery X-ray inspection equipment, and PCB precision processing and testing equipment. At the same time, the company's management improved, and the cost reduction efforts achieved initial results, further improving profitability.
The policy focuses on supporting directions. Intelligent upgrading brings historic opportunities China's manufacturing industry is on the cusp of industrial upgrading. Intelligent equipment and high-end electronic materials, as important branches of strategic emerging industries, are important signs representing the country's manufacturing level. 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. The State Council issued the “13th Five-Year Plan” for the National Strategic Emerging Industry Development Plan, which clearly states that it is necessary to promote the breakthrough development of the high-end equipment and new materials industry, leading a new leap forward in Chinese manufacturing, and striving for 2020, the output value of the high-end equipment and new materials industry to exceed the scale of production. 12 trillion yuan. “Intelligent manufacturing” was included in the government work report in 2018, and “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 work direction.
As a service provider specializing in providing high-end equipment and intelligent manufacturing system solutions, the company is expected to benefit significantly from the major trend of intelligent development in the manufacturing industry.
It strategically positions intelligent manufacturing system solution providers and actively promotes transformation and upgrading to companies that are deeply positioned in the consumer electronics field. At present, they have completed technical layout such as software, machine vision, automated production line solutions, etc., and initially have intelligent manufacturing system solution capabilities. At the same time, the company has implemented diversified development, expanded deeply into consumer electronics fields such as 3C, PCB, new energy, LCD panels, LED, etc., and has 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. The company closely follows market demand to expand production capacity and actively develops new products, which will 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.
Profit forecasts, valuations and investment ratings
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 17/13/10 times. Maintain a “Recommended” rating.
Risk warning
Downstream demand falls short of expectations, business integration falls short of expectations, and the risk of gross margin falling.