Events:
The company released its 2018 annual report, with revenue of 1.709 billion yuan, an increase of 4.55% over the same period last year, and a net profit of 106 million yuan belonging to the shareholders of the parent company, an increase of 11.76% over the same period last year.
Technology continues to innovate, and R & D efforts are strengthened. During the reporting period, the company continued to strengthen research and development, strengthen the construction of technological research and development system, and form a two-level management platform for product research and development at the company level and ministerial level, highlighting key R & D projects. The annual report pointed out that the company has established a high-end diode, single and two-way thyristor, MOS series products, the sixth generation IGBT domestic more complete, competitive power semiconductor device product system. In the downstream application field, it is actively expanding into new energy vehicles, frequency conversion household appliances, photovoltaic and other emerging fields, laying a solid foundation for the sustainable development of the company. The recent announcement pointed out that the company's rights issue raised funds to further cultivate MOS, IGBT chips. The announcement points out that in the field of over-junction MOSFET products in 19 years, the company has completed the construction of independent process platform for multi-layer epitaxial process super-junction MOS, developed products with 650V and 800V series as the main body, and continued to open up the field of TV and power supply to increase the company's product market share. IGBT, the company has completed 360V, 600V, 650V, 1200V, 1350V series, is developing ultra-high voltage IGBT products, promoting white goods, industrial frequency conversion, photovoltaic inverter and other fields, and continue to promote in the field of new energy.
The breakthrough of "import substitution" of power semiconductors, new applications in the industry to create a new market. The domestic leading enterprises have fully benefited from the accelerated replacement of domestic brands, and power semiconductors are the key factor for the independent control of core components in various fields. According to WSTS, the global output value of semiconductors is US $468.778 billion in 2018, and the output value of discrete devices is US $24.1 billion, accounting for about 5% of WSTS. WSTS expects the output value of discrete devices to be close to US $25 billion in 2019. The advantages of fine molecular industry of power semiconductors are as follows: 1) the combination of manufacturing and design is high: the design companies of logic chips only need to design and manufacture, while power semiconductors need to combine design and manufacturing at the same time, and adopt IDM mode, which requires in-depth understanding and accumulation; 2) R & D investment is low: integrated circuits pursue small linewidth, the R & D cost is too high, while power semiconductors do not pursue small linewidth, so R & D investment is low. 3) the market is diversified and the demand for new energy is large. The slow iteration of power semiconductor products and the diversification of the market reduce the risk of the company's operation.
Investment advice: buy-An investment rating. We estimate that the company's net profit from 2019 to 2021 is 163 million yuan, 211 million yuan and 242 million yuan respectively, and the net profit growth rate is 53.5%, 29.4% and 14.7% respectively, and the corresponding EPS is 0.17,0.22,0.25 yuan per share respectively. In view of the fact that the company has been deeply ploughed and accumulated in the power semiconductor industry for many years and actively holds the leading product category in the industry, it is given a 6-month target price of 7.1yuan, corresponding to 19-year dynamic PE 42X.
Risk Tip: macroeconomic downturn, product expansion in new application areas is not as fast as expected