The current situation of the company
We sort out the growth points and risk points of Galaxy Electronics, maintain the target price of 4.20 yuan, potential increase of 2%, maintain "neutral".
Comment
Military intelligent mechanical and electrical business is the ballast stone of the company's performance growth. Hefei Tongzhi Mechatronics mainly produces military intelligent power supply system, intelligent power distribution system, intelligent vehicle electromechanical integrated management system, which is mainly used in tanks, armored vehicles, self-propelled artillery, communication vehicles, reconnaissance vehicles and other special military vehicles. The business scale and intelligent manufacturing level are in the leading position in the industry. In the first half of 2018, among the company's three main industries (digital set-top boxes, intelligent mechatronics, and key parts of electric vehicles), only intelligent electromechanical revenue grew positively (YoY+13%). Looking forward to 2019-20, we expect the company's military intelligent mechanical and electrical business to maintain a steady growth trend of about 15%.
The business of electric air conditioning compressors is an important new growth point in 2019. Yinhe Tongzhi New Energy is mainly based on electric vehicle scroll compressor products. at present, the company's compressor has made great breakthroughs in refrigeration capacity, noise, energy efficiency, lightweight and other technical indicators, and its technology, quality and cost are better than those of domestic manufacturers. price and service are better than foreign manufacturers. At present, Jianghuai Automobile and other domestic car factories have established supply contracts with the company, and the company has delivered goods one after another in the second half of 2018, and the products are highly recognized by customers. We expect this business to become a new growth point for the company in 2019.
Valuation proposal
We are optimistic about the development prospect of the company's military intelligent electromechanical and electric air-conditioning compressor business, but we are more cautious about the profit margin forecast of the traditional electric vehicle supporting business (Luoyang Jiasheng + Fujian Junpeng). Cut the gross margin forecast, cut the 19-year net profit forecast for 18gram 5.7% to 193 million yuan / 236 million yuan, leading to a 20-year net profit forecast of 280 million yuan.
The current share price corresponds to 19.7x/16.5x 19Universe 20e Pmax E. We maintain a neutral rating and a target price of 4.20 yuan, corresponding to 20x/17x 19max 20e Pmax E, with a potential upside of 2%.
Risk
The growth and profit margin of the supporting business of electric vehicles are not up to expectations; the upstream risk of the cost of digital set-top box business.