The company released its 2018 semi-annual report on August 30, showing operating income of 8.502 billion yuan in the first half of 2018, an increase of 39.51% over the same period last year; net profit of 698 million yuan, an increase of 36.67%; and net profit of 511 million yuan, an increase of 21.52% over the same period last year.
Comments:
The whole industry chain layout, the product line is complete, the cost leading advantage is obvious. The company is a leading one-stop supplier of intelligent terminal core components in China, with a complete product line, while extending upstream the layout of backlight modules, SMT, FPC, 2D/2.5D/3D glass cover, nanocrystals and other wireless charging materials, 5G application of EMI shielding and absorbing materials, 5G antenna LCP materials and base station high-frequency composite materials and other materials and technologies. The production capacity layout of many products ranks in the forefront of the industry, with the scale advantage of front-line customer service at home and abroad and the price advantage of centralized procurement. Integrated multi-product supply capacity, recognized by first-class customers at home and abroad, and established good relations of cooperation with Samsung, Huawei, OPPO, VIVO, XIAOMI and other customers. At present, the company implements the "1x N" strategic model, serving N products for one customer at the same time, making full use of rich customer resources and product lines to promote business growth.
Master a number of core technologies to build 5G material technical barriers. By mastering the important supply link of the upstream amorphous strip, it has become one of the few companies in the world that can produce wireless rechargeable nanocrystalline materials. In order to meet the demand for high-speed transmission and lightweight intelligent terminal equipment in the 5G era, the acquisition of Antenna, one of the few high-frequency LCP flexible antenna mass production technologies in the world, introduced the production of multi-layer LCP flexible lines. In addition, the company's ultra-fine line flexible circuit boards and COF fill the gap in the OLED market. The core competitive advantage of the company is obvious, and the future performance can be expected.
Maintain a "buy" rating. We are optimistic about the dominant position of the company's traditional modules in the industry and the development prospects of 5G-related materials business. with the arrival of the 5G era, the company's performance will enter a rapid release period. From 2018 to 2020, the company is expected to maintain a "buy" rating of 0.63 EPS of 0.92 soybean 1.20 yuan respectively.
Risk tips: downstream market fluctuations, product prices decline, affecting business performance