Main points of investment
The performance was in line with expectations and the production capacity was released as scheduled: the company achieved revenue of 591 million yuan in 2018, an increase of 23.7% over the same period last year; net profit of 90.98 million yuan, an increase of 13.2% over the same period last year; of which 16.41 million yuan was recognized as equity incentive fee in the current period; if this effect is not taken into account, it is estimated that the net profit growth rate is about 30%, which is higher than the income growth rate. The revenue / profit was slightly lower than the previous forecast of RMB 6.2 / 110 million, mainly due to the fact that the company's electronic welding equipment business was slightly more affected by Sino-US trade frictions and the decline in consumer electronics boom. The net inflow of operating cash flow was 122 million yuan, maintaining a good cash flow situation. In addition, the construction of the company's technology center was completed in the fourth quarter of 2018, with a new area of 70,000 square meters, with a factory area of 20,000 to 90,000 square meters, and the contradiction in production capacity was significantly alleviated.
Optoelectronic business has entered the harvest season and entered BOE to enhance brand influence: the company's optoelectronic business achieved revenue of 91 million yuan in 2018, an increase of nearly 7 times over the same period last year, of which the income from camera module production equipment was 73 million yuan, and the gross profit margin was 25.2%. There is a lot of room for improvement with the scale growth. In addition, the company recently announced that it won the order of 80.21 million yuan for the 6th generation AMOLED laminating equipment of Beijing Oriental Mianyang, and was recognized by the front-line panel company, and the brand influence went up the stage again. The company has OLED Demura compensation equipment, 3D glass cover inkjet exposure equipment, COG, FOG and other technologies, are expected to form bulk orders this year, which will provide a driving force for the sustained growth of optoelectronic business.
Electronic welding equipment maintained steady growth: the company's electronic welding equipment revenue was 420 million yuan, an increase of 6.76% over the same period last year; gross profit margin was 39.1%, down 3.3 pct AOI and 3D-SPI realized revenue of 64 million yuan, an increase of 11.3% over the same period last year, with a gross profit margin of 42.1%, a slight increase in 0.5pct. The company has a 30% market share in the domestic electronic welding equipment market, and with the easing of trade frictions between China and the United States and 5G driving the trend of consumer electronics replacement, the growth rate of the business is expected to remain in a stable range of 10-20%.
Investment advice: we maintain the previous profit forecast, forecasting that the company's operating income from 2019 to 2021 will be 826 million yuan, 1.104 billion yuan and 1.405 billion yuan respectively, and the net profit will be 139 million yuan, 192 million yuan and 242 million yuan respectively, corresponding to 37 times the dynamic price-earnings ratio in 2019. Considering that the company has great growth potential in the optoelectronic business, maintain the "overweight-A" rating.
Risk tips: consumer electronics iteration speed is not as fast as expected; rising raw material prices reduce profitability risk, etc.