Events:
Jintuo shares released three quarterly results: the company realized 379 million yuan in the first three quarters of 2019, with a net profit of 18 million yuan; in the third quarter, it achieved revenue of 160 million yuan and a net profit of 13 million yuan.
Main points of investment:
Revenue growth in the third quarter became positive: the company's electronic assembly business fell for two consecutive quarters in the first half of the year due to the decline in investment growth in the electronics industry and trade frictions between China and the United States. Overall, the company's revenue fell 18.4% in the first three quarters, a marked improvement from the second quarter. The company's revenue in the third quarter was 160 million yuan, an increase of 14.19% over the same period last year, which was basically the same as in the second quarter. The net profit in the third quarter was 13.35 million yuan, down 36% from the same period last year.
Both gross profit margin and net profit margin have declined slightly, and are gradually stepping out of the transition pain period: the company's third-quarter gross profit margin was 35.9%, down 1.7pct from the previous quarter, and the net profit rate in the third quarter was 8.4%, which was down 1.1pct from the previous year, mainly due to: 1) the R & D investment in D-Lami products increased by 39.98 million yuan, an increase of 101% compared with the same period last year. 2) the acceptance period of the company's new products is relatively long, and the number of issued goods that have not been checked and accepted during the reporting period increases, resulting in inventory reaching 230 million yuan, an increase of 53% over the same period last year. 3) the growth rate of operating income decreased, and the expense rate increased during the period. The company is gradually stepping out of the transformation pain period, packaging, visual display and other business has been gradually recognized by downstream customers. In July, the company signed a 81.36 million yuan D-Lami laminating equipment contract with the 6th generation AMOLED production line project in Beijing Oriental Mianyang, and won the bid for 65.54 million yuan laminating equipment, upper laminating machine and lower laminating machine in September, and the brand influence was further enhanced.
Give a rating of "overweight". It is estimated that the company's operating income from 2019 to 2021 is 592 million yuan, 751 million yuan and 905 million yuan respectively, and the net profit returned to its mother is 47 million yuan, 92 million yuan and 127 million yuan respectively. Corresponding to the previous stock price, the dynamic PE is 68, 35 and 25 times respectively. Coverage for the first time, giving a "overweight" rating.
Risk hints: the iterative speed of consumer electronic products is not as fast as expected; the risk that the market competition intensifies and leads to the decline of product gross profit margin; the risk that the development of the company's new optoelectronic business does not meet expectations; the expansion of scale leads to the increase of operation and management risks.
