Main points of investment:
Cover for the first time and give a neutral rating. Product performance climbing and use scene landing will bring sustained high growth of smart speakers. As the leading core supplier of smart speakers in China, Fanta Technology is expected to enjoy the growth dividend of the industry. However, the growth of the mobile phone metal parts business, which accounts for the largest proportion of revenue, is obviously under pressure, which is a drag on the overall performance. It is estimated that the company's EPS in 2019-2021 will be 0.21, 0.24, and the company will be given a 20XPE in 2019, corresponding to the target price of 4.20 yuan.
Holding hands with the Internet giant, the smart speaker business is growing rapidly. Smart speakers are showing rapid growth in the Chinese market. According to Oviyun, sales of 19H1 smart speakers were 15.56 million, an increase of 233% over the same period last year, and sales of 3 billion yuan, an increase of 149% over the same period last year. As the leading core supplier of smart speakers in China, Fenda Technology is expected to enjoy the growth dividend of the industry. The company has become an important supplier of mainstream intelligent speaker brands such as Tmall Elf, JD.com Dingdong, Baidu, Inc. and bestbuy, and is expected to become an important growth point for the company's future performance.
The growth of mobile phone metal parts is under pressure, which is a drag on the overall performance. Fenda Technology's metal appearance business is mainly undertaken by subsidiaries Oppengda and Fuchengda, which was dragged down by the industry. In 2018, Opunda suffered an operating loss, including an impairment loss of 970 million yuan in assets, including a loss of 656 million yuan in goodwill impairment and 242 million yuan in inventory decline. Affected by the relocation of the factory, 19H1 continues to lose money and is expected to improve gradually after resuming production in the second half of the year. Although Fuchengda is a high-quality supplier of Apple Inc metal small pieces, it is expected that its profitability will decline.
Catalyst: consumption upgrading restart, smart speakers high-speed growth.
Risk Tip: Fu Chengda goodwill impairment, smart speaker prices continue to decline.