The performance in the first half of the year is relatively stable and is optimistic about the marginal improvement for the whole year. The company forecasts that the net profit of H1 in 2019 ranges from 31.4125 million yuan to 40.8363 million yuan, with a year-on-year change of-19.23% to + 5%. From the perspective of return net profit, the company's 2019Q1 profit was 14.1334 million yuan, down 13.77% from the same period last year. Ting 2019Q2 made a profit of 1727.91 million yuan, while 2018Q2 made a profit of 22.5005 million yuan. The year-on-year change was relatively stable. Affected by unfavorable factors such as the slowdown in the growth of downstream industries and the rapid rise in raw material prices, the company's Q1 gross profit margin was 24.61%, down 4.15pct from the same period last year. Q2 gross profit margin is expected to remain suppressed, affecting the company's profits. For the whole year, we expect the company to achieve marginal improvement.

Weiwang technology and maintenance industry are gradually improving, and Huarisheng is stable compared with the same period last year. In June 2018, the company established the enterprise group "Sudawig Group", which was divided into four major business groups to strengthen the planning and support for the business of the group's subsidiaries and technology research and development. give full play to the synergy of various business groups, public safety and new printing material business group revenue increased significantly in 2018, indicating the rapid growth of materials and touch business group. According to the forecast of H1 in 2019, the operating income of the parent company decreased slightly and the net profit decreased compared with the same period last year; the operating income of Huarisheng remained stable compared with the same period last year; and the operating income of Weiwang Technology and Weiyeda increased steadily compared with the same period last year. Due to the large increase in costs and expenses, the net profit has declined, and the loss of Weiwang Technology has been further narrowed.

Speed up the progress of industrialization, show and touch the great potential of the enterprise group. IHS Markit expects shipments of large panels to reach 3000 million in 2019, an increase of about 50 per cent from 2018. The company plans to increase the capital of Weiwang Technology with its own houses, buildings and land use rights, and Weiwang Technology actively increases the R & D investment of medium and large size light guide film and ultra-thin light guide plate, which leads to the rapid growth of display material business. At the same time, Weiyeda plans to invest 84 million yuan to expand the production base of high-performance flexible transparent touch devices, speed up the industrialization of new flexible touch screen technology, and further enhance its market position. display and touch business group is expected to become a new growth point of the company.

Profit forecast and investment advice: it is estimated that the net profit from 2019 to 2021 will be 1.11 million yuan, respectively, and the current stock price will be 37X/27X/21X corresponding to the dynamic PE, maintaining the "overweight" rating.

Risk hint: customer expansion is not as expected; raw material prices have risen sharply.