Events:
The company released its 2018 semi-annual report on August 30, showing operating income of 820 million yuan in the first half of 2018, an increase of 19.11 percent over the same period last year, net profit of 50 million yuan, up 47.28 percent, and net profit of 46 million yuan, up 52.67 percent over the same period last year.
Comments:
Downstream demand growth exceeds supply, and the new layout opens up a new situation of performance growth. Due to the policy promotion and the rapid development of new energy vehicle market, there is a huge demand for IGBT as the core component of new energy vehicle. The company attaches importance to technological innovation and product innovation, and has been deeply cultivated in the core design technology field of many high-end power semiconductor devices for many years. Under the guidance of the company's working policy of "three structural adjustments", special technical service teams are set up for core customers and key areas to improve the ability and response speed of product development and technical service support, coupled with its advanced technical marketing mode and domestic leading manufacturing capacity, the active layout of new energy vehicles, frequency conversion household appliances, photovoltaic and other emerging fields, the final progress to achieve the desired results, to achieve rapid growth.
"made in China" accelerates, and industry leaders continue to benefit. At present, China has become the world's largest market for power semiconductor devices. With the continuous improvement of the technical level of the domestic power device industry, the development of the new energy vehicle industry, the rise of high-end manufacturing, and the implementation and deepening of the national civil-military integration strategy, the expansion of "made in China" of power semiconductors in the middle and high-end market and national security field is constantly accelerating. The import substitution trend of China's power semiconductor industry is obvious. Therefore, it is considered that under the high growth of the industry and the general trend of independent control, domestic high-end power semiconductor manufacturers will usher in a period of historical opportunity, and the company will take the lead in achieving a breakthrough in the localization of high-end devices such as IGBT, which will undoubtedly achieve rapid development for a long time in the future.
Maintain a "buy" rating. We are optimistic about the industry development prospect of the company's main business power semiconductor devices, and the company's performance has entered a rapid release period. From 2018 to 2020, the company is expected to maintain a "buy" rating with an EPS of 0.22 pounds and 0.27 dollars respectively.
Risk hint: the progress of research and development is not as expected, and the competition in the industry intensifies.