Core viewpoints

Profits in the first three quarters were in line with expectations: revenue in the first three quarters was 13.15 billion yuan, an increase of 27% over the same period last year, and the net profit was 1.19 billion yuan, an increase of 31% over the same period last year, which was within the previously expected range. The gross profit margin in the first three quarters was 18.3%, an increase of 0.58% over the same period last year, and the net profit margin was 8.8%. The non-return net profit was 960 million yuan, an increase of 20% over the same period last year.

The outlook for the whole year is relatively conservative: the company forecasts full-year net profit of 1.3 billion yuan to 1.65 billion yuan, an increase of 10% over the same period last year, with a median range of 1.48 billion yuan, which is relatively conservative. The company's resistive touch screen, H-INK electronic paper, chemical products slow down, and Xinfeng plant failed to release capacity on schedule, resulting in slower-than-expected FPC growth.

Actively promote state-owned assets into shares, long-term good for the development of the company: the company previously announced that General Wen and other shareholders of the company will transfer 15% of the total share capital of the company to Fujian Electronic Information Group at a transfer price of 6.86 yuan per share. The good thing about this share transfer is that: 1) Fujian Electronic Information Group has a number of electronic-related industries and has business cooperation with Helitai. And the two sides plan to cooperate in the future to carry out 5G projects. 2) the background of state-owned assets has more advantages for the financing scale and financing cost of Helitai; 3) the transfer of equity can solve the risks such as equity pledge that the market is most worried about.

Financial forecasts and investment suggestions

We forecast that the annual EPS of the company in 18-19-20 is 0.49, 0.66, respectively (the original forecast is 0.57, 0.81, 1.05, and adjusts the growth rate of resistive touch screen, H-INK electronic paper, chemical products and FPC products according to the situation of the company in the first three quarters, and slightly adjusts the management expense rate). According to the comparable company's 18-year 15-fold PE valuation, the corresponding target price is 7.35 yuan. Maintain the buy rating.

Risk hint

There is still uncertainty in the transfer of equity; the development of touch screen business and camera business may not be as expected, and the progress of wireless charging may be slower than expected.