This report is read as follows:
The majority shareholder of Optoelectronics is Arms Industry Group, and its products include and are not limited to optical core components and materials. As the only listing platform of Northern Optoelectronics Group, it is expected to integrate assets such as Optoelectronics Group, Laser Group and Night Vision Group.
Main points of investment:
1. Cover optoelectronic shares for the first time, with a target price of 11.90 yuan, carefully increasing its holdings. The company is engaged in the R & D and production of military and civilian optical systems, components and components. With the mass application of optically guided smart ammunition, the defense sector, which accounts for 76% of the business, will make great progress. As the only listing platform of Northern Optoelectronics Group, the company has the potential of asset integration. We estimate that the company will have an EPS0.17/0.19/0.21 of 11.14% in 2019-2021 and CAGR. Give Optoelectronics shares 70 times PE in 2019, considering that it owns high-quality assets such as Optoelectronics Group in vitro, we give a certain valuation premium, corresponding to the target price of 11.90 yuan, given a "prudent overweight" rating.
two。 Suppliers of core optical products have made great achievements in the trend of military informatization. 1) the company is a large-scale supplier of comprehensive military and civilian optical products and weapon systems, which has a core position in the field of weapons industry; 2) the future national defense and military expenditure is the focus of long-term investment, and the optical system is a way to find intelligent ammunition. With the mass application of information weapons, there is a large demand for stock updates and new products; 3) there are scientific research institutes as research and development support in vitro, and product upgrading is guaranteed.
3. The company implements diversified and three-dimensional layout in the field of optics, which is expected to benefit the whole industry chain. 1) the company's defense products include large weapon systems, precision seeker, optoelectronic information equipment, etc., with diversified layout in terminal products; 2) the company provides R & D and manufacturing of optical materials, optoelectronic materials and components, as well as system integration services, and the company implements vertical layout in the industrial chain.
4. Small platforms and large groups are expected to integrate group assets. 1) the company is the only listing platform of Northern Optoelectronics Group, and there is potential for injection of high-quality assets in vitro; 2) Optoelectronics Group is juxtaposed with Laser Group and Night Vision Group, at present, the group shell resources are scarce, and the company is expected to become an asset integration platform.
Risk hint: the new product is lower than expected; the growth rate of military expenditure is lower than expected.
