Main points of investment
2019Q1 is the bottom line and is expected to make a good profit in the second quarter. 2019Q1, the company realized 61 million yuan in revenue, down 54.20% from the same period last year; the net profit returned to the home was-14 million yuan, down 176.42% from the same period last year. Mainly due to the macroeconomic impact at home and abroad, the growth rate of the downstream industry of electronic equipment has slowed down, and the progress of fixed asset investment has been delayed, resulting in a decrease in sales orders in the current quarter; and the company's investment in innovative product research and development has increased. We believe that 2019Q1 is the bottom of the company's performance, in the traditional business, customer demand for equipment has been delayed but has not disappeared, downstream orders will resume, and the company officially received the BOE 3D laminating equipment order in April, the new business began to contribute, and 2019Q2 performance is expected to show an inflection point.
Share buyback shows the company's confidence and pays attention to talent motivation. The company announced its intention to buy back the company's shares on January 10, 2019, with a repurchase amount of RMB 120 million and a repurchase price of no more than 24 yuan per share. As of March 31, 2019, the company had bought back 2.15 million shares, accounting for 0.88% of the total share capital, with a transaction value of 39.76 million yuan and an average price of about 18.48 yuan. Share buybacks are mainly used for stock ownership plans or equity incentives to convert corporate bonds issued by listed companies that can be converted into stocks.
The company has been ploughing the electronic equipment industry for many years, and has constantly launched new optoelectronic modules to achieve two-wheel drive. At present, the core logic is that the inflection point of domestic replacement for 3D laminating equipment has arrived, and the company is the only domestic equipment manufacturer whose order has landed. We estimate that there is a large space for domestic investment demand for OLED equipment in the future, and the company is expected to benefit from this wave of domestic substitute dividends. It is expected that the company's net profit in 2019-2020 will be 1.80 yuan and 255 million yuan respectively, maintaining a "prudent overweight" rating.
Risk hint: the investment progress of downstream panel factories is not as expected, and the risk of intensified competition in the industry