The 2018 performance was slightly lower than expected, and the 19Q1 performance declined: the company disclosed its 2018 annual report, realizing operating income of 590 million yuan, an increase of 23.68% over the same period last year; and realizing net profit of 90.9783 million yuan belonging to listed companies, an increase of 15.17% over the same period last year. Among them, the company set aside 16.414 million yuan in equity incentive fees, which had a certain impact on the company's operating results. In 2018, the net cash flow generated by the company's operating activities was 122 million yuan, and the sales rebate was in good condition. The main reasons for the company's sound performance in 2018 are: the steady growth of sales income of electronic welding equipment and intelligent machine vision inspection equipment; the harvest of sales results of some optoelectronic module special equipment, forming a new profit growth point; the increase in software tax rebates and government subsidies received from the same period last year, the financial income of idle funds, and so on. The net profit loss attributable to shareholders of listed companies is expected to be 7 million yuan to 12 million yuan in the first quarter of 2019, compared with 20.0286 million yuan in the previous period. The reasons are: (1) due to the influence of the overall economic environment, the demand for equipment renewal by enterprises downstream of electronic equipment installation has weakened, and the demand for new equipment has slowed down, resulting in a year-on-year decrease in sales orders for electronic welding equipment and intelligent machine vision inspection equipment; (2) the VAT software tax rebate received by the company has decreased significantly compared with the same period last year.
Special equipment for optoelectronic module production has made a breakthrough and contributed to new growth points: the company's optoelectronic equipment mainly includes camera module, biometric module, 3D glass, 3D lamination, display module and so on. In 2018, the company's optoelectronic module production equipment achieved a business income of 90.0691 million yuan, an annual increase of 689.62%. Among them, biometric module production equipment and camera module production equipment performed well, realizing business income of 12.966 million yuan and 73.4298 million yuan respectively, an increase of 99.02% and 645.5% respectively over the same period last year. As off-screen fingerprints and multi-cameras have become the mainstream of smartphone innovation, the company has quickly responded to market demand by developing and launching new technologies to actively open up the optoelectronic business market.
New opportunities in the panel market, OLED equipment volume: the launch and popularity of folding screen mobile phones significantly boost the demand for OLED display panels, and the huge investment of local enterprises provides development opportunities for domestic OLED panel manufacturing equipment. The company broke through the bottleneck of the development of 3D laminating equipment related to OLED flexible screen and completed the production of a prototype of 3D-Lami laminating equipment and verified it on the client side. According to the announcement of the company on April 11, 2019, it was confirmed that the sixth generation AMOLED (flexible) production line project in Mianyang BOE was awarded, with a total bid amount of RMB 81.2 million, accounting for 17% of the business income in 2017. D-Lami is the "core equipment" of the module segment, the company breaks the foreign technology monopoly, and OLED equipment will bring new increments for the company's performance.
Electronic equipment assembly leader, the new plant is expected to increase the company's production capacity: as a leading enterprise in the electronic welding industry, the company has a market share of 30%. In 2018, the company's electronic equipment business achieved a business income of 483 million yuan, of which the business income of electronic welding equipment was 419 million yuan, an increase of 6.76% over the same period last year, and that of intelligent machine vision inspection equipment was 63.998 million yuan, an increase of 11.27% over the same period last year. The company's business has entered a stage of steady development. In December 2018, the company's "High-tech R & D Center" located in Baoan District, Shenzhen was completed, which will enhance the company's existing business capacity and strengthen the company's R & D advantages.
Investment advice: we expect EPS from 2019 to 2021 to be 0.7,0.90 and 1.1yuan, corresponding to 32,24,19 times PE, maintaining a "recommended" rating.
Risk hint: the growth space of electronic equipment installation business is limited; the development of optoelectronic new business is not as expected.