Company dynamic events
On October 28th, the company released its third quarterly report showing that revenue in the first three quarters was 813 million yuan, up 1.37% from the same period last year; net profit from home was 60 million yuan, down 3.56% from the same period last year; net profit from non-return to home was 54 million yuan, up 4.93% from the same period last year; revenue in the third quarter alone was 290 million yuan, up 8.21% from the same period last year; net profit from home was 25 million yuan, up 7.96% from the same period last year The net profit of deducting non-return was 22 million yuan, an increase of 20.70% over the same period last year.
Comments on matters
Large screen touch film and light guide products are the core points of the company's growth.
The company's main business is subdivided into four business groups: public safety and new printing materials, reflective materials, display materials and touch, and high-end intelligent equipment. The specific products of public safety and new printing materials are mainly anti-counterfeiting film, laser film and special decorative film, with the parent company as the main business body. Reflective materials are mainly used in the two major fields of road traffic safety protection and personal protection, and the operating body is Huarisheng, a wholly-owned subsidiary. Display materials and touch specific products include light conductive film / board and touch conductive film, the former operating body is the wholly-owned subsidiary Weiwang, and the latter is the holding subsidiary Weiyeda. The company shows that materials and touch business groups are the core focus of short-term performance growth. The company's high-end intelligent equipment business group-related equipment is independently developed by the company, on the one hand, it provides strong support for the company's micro-nano lithography needs, but also for the company in MEMS and specific areas of semiconductor products (RF devices, filters, etc.) to provide support. The company's high-end lithography equipment continues to be promoted in universities and scientific research institutes and has good market feedback, and related equipment has become one of the core competitiveness of the company's micro-nano lithography business.
The company's touch-controlled conductive film business is a monolithic capacitive touch film product based on Metal Mesh technology. Its cost is close to that of traditional infrared touch products, and its sensitivity is greatly improved. The related technology has great potential to replace the flat panel market in the conference / education field. At present, the company has been qualified as a Huawei supplier, and 55-inch and 65-inch touch products have also been recognized by customers and gradually introduced. The company announced on August 19th that Weiyeda plans to invest 1.8 billion yuan to build a "high-performance flexible touch screen and module and R & D center project", with a land area of about 105mu, and is expected to release production capacity one after another by the end of 2020. the relevant capacity expansion plan demonstrates the company's confidence in developing the market in the future.
The company's wholly-owned subsidiary Weiwang's performance growth this year, on the one hand, benefited from the increase in sales of original products, while large-size light guides were officially launched for mass production, as well as the new flat panel lamp business to further thicken the performance. Weiwang has added VESTEL, Foxconn Group Chuangchuang, BOE and other major customers on the basis of XIAOMI and other customers, and the products are gradually recognized by the market. The company announced on October 15 that Weiwang Technology and Jiangsu Dafeng Economic Development Zone intend to invest 550 million yuan in new sets of hot-pressed light guide plate production lines and extrusion optical plate production lines to enhance the market competitiveness of the company's light guide products.
The performance is gaining momentum in the future.
According to the third quarterly report, the company's gross profit margin in the first three quarters was 27.56%, year-on-year slightly lower 0.11pct, net profit 7.36%, year-on-year slightly lower 0.06pct, company fixed assets turnover 2.8,2.7 in the same period last year, return on net assets 4.13%, down 0.28pct; company inventory turnover days 147,134,158,137 in the same period last year The company's asset-liability ratio was 32.87%, an increase of 3.84pct over the same period last year. The current ratio and quick ratio were 1.63 and 1.15 respectively, compared with 1.90 and 1.34 in the same period last year. At present, the company's performance and profitability are still in the stage of steady adjustment, and the increase in capital expenditure brought about by the capacity expansion plan has a certain pressure on the enterprise's cash flow. Combined with the progress of the company's product research and development and market development, we believe that the company is in the adjustment stage before the performance, the company performance still needs a process, but full of expectations for the growth of the company.
Profit forecast and valuation
We expect the company to achieve operating income of 1.18 billion yuan, 1.63 billion yuan and 2.43 billion yuan from 2019 to 2021, an increase of 3.95%, 38.14% and 49.08% respectively over the same period last year; the net profit of shareholders belonging to the parent company is 64 million yuan, 92 million yuan and 168 million yuan; EPS is 0.28,0.41 yuan and 0.74 yuan respectively, corresponding to PE 76X, 53X and 29X. The "overweight" rating will be covered for the first time in the next six months.
Risk hint
(1) the introduction of the new product market is not as expected; (2) the promotion of the smart display terminal is not as expected.