Items:
The company issued a forecast for the first quarter of 2019, with a net profit of 27.49 million yuan to 33.6 million yuan, stable performance of information anti-counterfeiting materials, smooth progress of electronic innovative materials business, and basically the same revenue and net profit as in the same period last year.
Comments:
During the reporting period, the performance of the company's traditional information anti-counterfeiting materials was stable, the electronic functional materials made further breakthroughs, the company relied on the core technical capabilities of the traditional business to expand horizontally, and the product matrix was in the process of continuous expansion. The development of a variety of core materials is progressing smoothly and volume is just around the corner, which lays a solid foundation for the company's high-speed development in the next 3-5 years.
The company's EMI and ACF material business is accelerating development and is expected to achieve domestic replacement. At present, the company has sufficient production capacity of EMI materials, and has entered the supply chain of domestic mainstream brands such as Huawei and ZTE, and is expected to make progress in international major customers in the future; in terms of ACF materials, the company currently verifies that domestic production is smooth in domestic mainstream manufacturers, and is expected to achieve batch supply in the second half of 19.
The company is the only domestic / global only supplier of stress test film, and has fully cut into large panel manufacturers such as BOE / Shen Tianma. Stress test film, as an indispensable pressure testing consumables in automobile, panel and other fields, was previously monopolized by Fuji of Japan. The company has made a breakthrough in material technology and is expected to quickly seize the market through cost advantages. At present, the company is the only supplier of BOE / Shen Tianma except Fuji of Japan. It is expected to capture half of Fuji's market share within three years.
Profit forecast, valuation and investment rating. We estimate that the company's performance from 2018 to 2020 will be 104 million yuan, 131 million yuan and 202 million yuan respectively, and the corresponding PE will be 36 times, 28 times and 18 times respectively. During the reporting period, the company's main business operation was stable, the new materials business was progressing smoothly, and the progress was in line with expectations. We maintain the company's target price of 42.8 yuan and maintain the "push" rating.
Risk hints: electronic materials research and development and industrial base project construction risks and project benefits can not achieve the expected risk; electromagnetic wave protective film products future sales scale is lower than expected risk; thermal magnetic strip business growth stagnation under the EMV migration trend.
