Core viewpoints
Steady growth in performance, in line with expectations: the company released a report for the third quarter of 18 years, with revenue of 2.335 billion yuan in the first three quarters, an increase of 25% over the same period last year, and a net profit of 497 million yuan, an increase of 34% over the same period last year, which is within the previous forecast range and in line with market expectations. In the first three quarters, the net profit of non-return was 276 million yuan, an increase of 25% over the same period last year, and the non-recurrent profit and loss was 221 million yuan. Q3's revenue in a single quarter was 713 million yuan, an increase of 5% over the same period last year, and its net profit was 184 million yuan, an increase of 18% over the same period last year. It deducted 85.29 million yuan in non-return net profit, a slight decrease of 9% over the same period last year. Q3 single quarter due to the comprehensive upgrading of white LED products and increased investment in innovative products such as MiniLED and Micro LED, resulting in certain revenue and profit losses, after the completion of the adjustment, Q4 operation returned to normal. The RMB continued to depreciate during the reporting period, and the company lost 22 million of Q3 in a single quarter due to US dollar debt and other factors, with a total loss of nearly 65 million yuan in the first three quarters.
Profitability was stable and cash flow improved significantly: gross profit margin in the first three quarters was 35.09% and net profit margin was 21.03%, up 1.29 pct and 1.45 pct respectively from the same period last year. Q3 single-quarter gross profit margin is 34.50% and net profit rate is 25.81%, which is 1.62 pct and 2.88 pct higher respectively than the same period last year. The operating cash flow in the first three quarters was 691 million yuan, a sharp increase of 1927% over the same period last year, with a significant improvement.
Fixed increase code emerging technology and semiconductor business: the company will add 2.1 billion yuan, mainly for Micro LED, VCSEL laser chips, MEMS sensors and other LED innovation & semiconductor projects. As a leading company of LED chips, the company actively reserves new technologies and projects in the industry. We judge that MiniLED will start quickly next year, and technology-leading companies will directly benefit.
Meixin semiconductor merged watch, semiconductor platform has been formed: in the first half of 18 years, Meixin has officially merged table, the products are mainly accelerometers and geomagnetic sensors, downstream including consumer electronics and automobiles, customers are XIAOMI, Ford, GM, BMW and other first-class manufacturers. The promised profit in 18-20 years is 1.1 billion yuan, 1.3 billion yuan, which is a rapid growth.
Financial forecasts and investment suggestions
We forecast that the annual EPS of 18-19-20 will be 0.64 PE 1.21 yuan (the original forecast is 0.77 Universe 1.08 plus 1.39 yuan, adjusted for the growth rate of LED chip revenue due to exchange losses and trade frictions between China and the United States), and the comparable company values the company at 18 times PE over 18 years, corresponding to the target price of 11.52 yuan, and maintains the buy rating.
Risk hint
The competition in LED chip industry is fierce; the growth of sapphire business is uncertain; the progress of investment in new business may not be as expected; and Meixin's performance may not meet expectations.
