Event: the company announced the pre-plan for the non-public offering of shares in 2019, and the total amount of funds to be raised will not exceed 350 million yuan. After deducting the issuance costs, it will all be used for the "construction project of high-speed and high-stability radio frequency coaxial cable with an annual production capacity of 400,000 km 5G communications and aerospace".
Radio frequency coaxial cable leading enterprises, raise investment to expand production and increase profitability. The company is the leading company of RF coaxial cable in China, and its main products are widely used in terminal electronic products such as mobile phone / computer / TV / wireless communication, mobile communication base station, national defense, aerospace and other fields. in terms of customers, the company focuses on developing large and medium-sized electronic equipment manufacturers, including Qiji Technology, Lianzhan Technology, PUL Technology and so on. The final service terminal electronic products include Apple Inc, Samsung, Hewlett-Packard, Lenovo, TP-LINK and many other world-famous brands, highlighting the company's position in the industry. The company's IPO investment projects have reached production, and its performance has continued to grow steadily since 2016, with revenue of 370 million yuan in 2018 and net profit of 44.14 million yuan. This investment will further solve the bottleneck of the company's production capacity and thicken the profitability of the company.
The industry is booming, and the market demand will continue to grow. The Ministry of Industry and Information Technology has issued 5G commercial licenses to China Telecom Corporation, China Mobile Limited, China Unicom and China Radio and Television, and the domestic construction and application of 5G will be carried out step by step. The 5G Internet of everything promotes the rapid development of Internet of things terminals and drives the transformation of electronic products. The application field of RF coaxial cable products will be more extensive, and the configuration depth will gradually increase. In the field of aerospace, the market demand for RF coaxial cable for military and civil aerospace equipment is increasing day by day, and the future space is very broad. With the ability of continuous innovation, advanced technology and good product quality, the company has successfully cut into the field of high-end RF coaxial cable occupied by multinational enterprises, and has a favorable position under the background of domestic substitution. Through this investment project, the company's strategic layout of the 5G communications and aerospace market will greatly enhance the company's industry position and market competitiveness.
Profit forecast and investment advice: optimistic about the strategic layout of the company's fund-raising project, the net profit from 2019 to 2021 is expected to be 0.54 × 0.71 / 94 million yuan respectively, and the current stock price corresponds to a dynamic PE of 48X/36X/27X, maintaining the "overweight" rating.
Risk hint: downstream market expansion is not as expected.